Rewarding for performance
Old Mutual introduced its new multi-boutique investment house Old Mutual Investment Group SA (OMIGSA) to the media at a function in Johannesburg on Wednesday. OMIGSA is comprised of 12 autonomous and independently run investment boutiques and houses all the investment businesses in the South African Old Mutual Group.
"The launch of OMIGSA marks our [Old Mutual's] transition to a business with 12 nimble and fiercely independent investment businesses, with one main aim: to deliver great performance to clients," says OMIGSA CEO Thabo Dloti.
Speaking at the launch, David Bauer highlighted major demographic shifts, lower investment returns and regulation as factors impacting the Global Investment Management industry. David is a partner at Casey, Quirk and Associates, a management consulting firm that focuses on investment management organisations.
Key reasons for the shake-up
The Investment Management industry is also affected by the strain placed on modern-day retirement systems. In South Africa, both public and private pension funds have come under significant pressure in recent years. Shortfalls are ultimately carried by the hapless private investor, who is under more pressure to make provision for his own retirement than ever before.
These factors contributed to Old Mutual's business restructure objective of "better performance through tighter focus". Each of the boutiques will focus on its own specialist investment area and concentrate on aligning its goals with those of the client.
Clients are able to gain exposure to the entire range of asset classes by selecting a specific investment boutique. And once their selection is made a focused and highly motivated investment management team will be responsible for investment and performance.
"Focus on you. Focus on investment. Focus on performance."
The investment boutiques have been given a clear mandate, which is to focus on clients, investment and performance.
OMIGSA will provide the infrastructure to assist the boutiques in achieving this mandate. Their contribution to the boutiques will include a strong brand, access to South Africa's largest distribution force, cutting-edge investment research, advanced IT systems and a dedicated compliance division.
OMIGSA views the relationship with each of the boutiques as a professional partnership. They will ultimately share the spoils of these ventures with the relevant management teams.
Product distribution should remain the same
It should be business as usual for the thousands of brokers and financial advisers selling the South African Old Mutual investment product offering. While the boutiques enjoy the freedom to independently negotiate commission structures and fees, the administrative functions will still be handled by Old Mutual.
Editors thoughts:
We welcome any change that results in more focussed investment advice. Individual Investment managers will be rewarded for performance - a great way to ensure market beating returns.
