Those that have made high returns by overpaying for higher-risk/lower-quality credit have been lucky and credit conditions are unlikely to be so easy in the future, writes Michael Block. Now is the time to take a very thorough look at one’s credit exposures.
Scale is a double-edged sword but fund managers with the right model can make it work. And while other super funds are internalising as fast as they can, Aware Super will never completely abandon outsourced management.
Ninety One flows augur well for big firms
In a positive sign for diversified global managers, the dual-listed Ninety One has reported a turnaround in fund flows and a big increase in profits following strong returns in the past six months.
The company said in London last week (November 16) that net inflows of £3.9 billion sterling (A$7.2 billion), taking total assets under management to £140 billion (A$259.3 billion) at September 30, also reflected a “general uplift in client activity across asset classes off the back of increased client risk appetite”. The inflows reversed a 12-month trend of outflows.
Ninety One was listed on both London and Johannesburg stock markets in March 2020, following a change of name from Investec Asset Management to underline its independence from its banking parent.
Fixed income and equities were the largest generators of net inflows in the six months, producing net gains of just under £1.9 billion apiece. In fixed income, emerging market, corporate and sovereign debt strategies were the main drivers of inflows, while in equities, Ninety One saw “significant” inflows into global and thematic strategies. However, multi-asset net outflows of £290 million followed redemptions from diversified growth strategies.
In the six months, net revenue was up 10 per cent to £328.4 million and pre-tax profit up 39 per cent to £132.1 million, including £14.9 million in proceeds from the sale of Silica, its transfer agency back-office business in South Africa.
The manager also announced last week that Nazmeera Moola had been appointed Ninety One’s chief sustainability officer, a newly created role. She was previously deputy managing director and head of South African investments.
While it has a long history in ESG, the new role incorporates Ninety One’s investment integration, advocacy, corporate transition to net zero and developing and implementing efforts to mobilise dedicated funding for an inclusive net zero transition.
Hendrik du Toit, the firm’s chief executive and founder, in 1991, was cautious about future market conditions, however, in a statement to shareholders. He said: “While the supportive market conditions of this reporting period will not last indefinitely, we see substantial long-term growth opportunities ahead. We will continue to invest in our people and our business so that we can deliver for our clients. This remains our formula for value creation.”
