Asset manager focus shifts to building an African legacy

Leaders in the asset management industry must manage clients’ funds to deliver environmental and social impact in addition to generating market-leading investment returns. They must also participate in the ongoing evolution of the financial services sector by leveraging their businesses to influence positive socio-economic and transformation outcomes.

“We take our corporate social responsibility very seriously; we want to be part of the solution of creating a healthy and prosperous Africa, because without that foundation in place there is no business,” said Khanyi Nzukuma, Chief Executive Officer: Glacier by Sanlam. He was commenting during a November 2021 Sanlam Financial Confidence webinar, which reflected on how leadership and partnerships had evolved during more than 20 months of the pandemic.

“The theme of this webinar was inspired by leadership and partnerships in times of rapid change; it has become critical for us to embrace change, to navigate new and unplanned paths, to identify opportunities and partnerships and to inspire positive and constructive action,” said Theesan Moodley, General Manager: SanlamConnect. He was one of four Sanlam executives who adopted a united, no-nonsense approach to the tough issues facing South Africa in 2021/22.

The executives singled out three items that were ‘top of mind’ at the diversified financial services giant. “The first is a desire to build an asset management business that reflects South Africa’s reality, a business that has the empowerment of citizens and the transformation of the country at its heart,” said Carl Roothman, incoming Chief Executive Officer: Sanlam Investment Group The intention is to move beyond generating returns for shareholders and clients, towards building a legacy that will serve communities across South Africa and the rest of Africa for the next 100 years.

The second and third objectives include achieving wider financial inclusion and spearheading socio-economic improvements off the back of impact and sustainable investing activities across Africa. Roothman singled out environmental, social and governance (ESG) factors and investing for impact and sustainability as critical considerations for successful asset managers, alongside traditional business attributes such as offering leading solutions capabilities and occupying a competitive market position.

Leadership during these challenging times centres on anticipation, observed Jurie Strydom, Chief Executive Officer: Sanlam Life and Savings. “We advise people about their finances and securing their financial futures, so it is essential that we are able to anticipate the impact of change and uncertainty on financial behaviours and outcomes,” he said, before reflecting on the opportunities presented by the pandemic and working from home.

Sanlam Life has been at the heart of the COVID-19 storm, paying out billions of rands in pandemic-related life insurance claims in 2020 and 2021, while the non-life business, Santam, has paid out billions to honour contingent business interruption claims.

South Africa’s financial services firms have done far more than simply meeting their insurance obligations through the pandemic, most notably by assisting government with its pandemic response. “We have played a leading role, working closely with ASISA and Business for South Africa, first on the framework for procuring vaccines, and then on the logistics around making the vaccine available to South Africans,” said Strydom. The business continues to advocate for the widespread take up of the vaccine to assist the country in returning to business as usual, even if it’s under new normal conditions.

Consumer education and financial advice emerged as non-negotiable components in a future-fit financial services sector, especially as more South Africans graduate into the middle class and begin accumulating assets on their wealth creation journeys. “Holistic financial advice is becoming more important. We must create personal financial planning frameworks that span across investments, insurance and retirement funding to enable us to offer a coherent response to clients’ needs”, said Nzukuma.

This observation was supported by Strydom, who said that clients were desperate for good, trusted advice. “The intermediary business remains the heart and overwhelming majority of the value of the Sanlam Group. We expect all of our clients to benefit from great intermediary advice relationships over time,” he said.

What does the future hold? According to Roothman, the group’s key purpose is to empower future generations to be financially confident, financially secure and prosperous. “Our main purpose as an asset manager is to empower and encourage our advisers to instil confidence in their clients that, through the way we invest, we can provide the outcomes they are looking for,” he said. These positive outcomes derive from the group’s proactive response to emerging investment themes, such as the shift from public to private markets and the return premium available from building impact and sustainability into investment decision making.

“We have a responsibility to invest in line with the United Nations’ Sustainable Development Goals and thereby make a positive contribution to South Africa,” concluded Roothman. “As leaders of South Africa’s large listed firms, we must leverage our investing activities to create a country, and an African continent that we can still conduct business in 100 years from today”.