South Africa: A Fragmented Market Is One Where Two Heads Are No Longer Better Than One

analysis

For years, boutique asset managers were all the rage in South Africa. It was a unique little utopia compared with the rest of the world. Investors were spoilt for choice and there was more than enough to go around to keep all the mom-and-pop shops afloat. But times have changed. High fees and low performance are driving savings to index products in droves and red tape is choking the life out of the little guy. And it looks as if the consolidation of power has begun.

Former Allan Gray and Investec colleagues Piet Viljoen and Sam Houlie will soon again share office space. The boutique firms of RECM and Counterpoint Asset Management where they serve as chairman and chief investment officer respectively have recently announced their engagement after a nine-month courtship.

The couple will walk down the aisle in March 2020 and will live a consolidated life thereafter under the Counterpoint Asset Management name.

The transaction is still subject to regulatory approval, but the combined estate will manage assets in excess of R6.5-billion, Counterpoint states in a press release.

"Where fund overlap exists, funds will be amalgamated."

"We share the same vision and consolidation makes sense. Combining assets and skills...

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