Sibusiso Mabuza was appointed as chief executive officer of Momentum Asset Management on 1 December 2011. Together with key investment executives, Mabuza undertook a strategic review of the business with a strong focus on stability, and growth underpinne
While Momentum Asset Management has faith and support for its current equity and multi-asset class capabilities, it has come to appreciate that it is not able to cater for all the client needs in its selected market segments with its current limited investment options. It decided to expand its capability set by including strategies that are not only differentiated, but are also complementary to our current capabilities.
Momentum Asset Management considered a number of options and in this strategic review process, elected to build and not to buy. It specifically identified Sam Houlie as a professional with exceptional investment management pedigree, and with whom it shares a common purpose and value system.
The strategic review resulted in the decision to restructure the business into three autonomous teams as outlined below:
1. Unconstrained strategies
2. Fixed interest strategies
3. Core strategies
In this new structure, there will no longer be a role for a traditional chief investment officer, because each of the team leaders will be fully accountable for the performance of their specific teams. Accordingly, each of these teams will have autonomy, will be fully accountable for their mandates, will have independent research teams and will be headed up by different individuals. While Momentum Asset Management has different teams for diversification purposes, it still operates as one asset management business. Together with the chief executive officer, the team leaders will be collectively responsible for the success of the asset management business.
Unconstrained/Contrarian strategies team: Sam Houlie will join the firm effective 1st July 2012 as head of this team based in Cape Town in their existing Newlands offices. He will build a new contrarian investment capability from scratch. This team will manage local and global contrarian strategies for institutional and retail clients. Momentum Asset Management has committed significant assets to appropriately seed these strategies.
Fixed Interest Strategies: Momentum Asset Management currently has one of the strongest fixed interest teams in South Africa, headed by Conrad Wood who has a solid industry reputation. The fixed interest team, based in Sandton, will offer one centre of excellence for Momentum in the fixed income space, providing expertise to both the core and contrarian teams.
Core Strategies: the leader of the core team - focused on equity, absolute return funds and balanced mandates - will be announced shortly following the reassignment of Jonathan Stewart, who will now play a strategic role in MMI Holdings. Momentum Asset Management currently favours the appointment of an internal candidate, someone who understands the team’s investment philosophy and process, to head up this team. This team has delivered strong equity performance over the past 12 months on both the institutional and retail front relative to peers. The team’s success was recently acknowledged by the awarding of Raging Bull and Morningstar Awards for the Momentum Small/Mid-Cap, Momentum Resources and Momentum Value Funds.
Momentum Asset Management is confident that this structure will position the business well for growth in our selected market segments and should offer the required income stability necessary to support the business in the long term.
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