Transformation improving across the board in investment management companies
23 August 2007 | Investments | General | Investment Management Association (IMASA) of South
Transformation improving across the board in investment management companies (statistics as at 31 December 2006)The investment management players in South Africa are transforming, particularly in terms of strong ownership and employment equity, research by the Investment Management Association (IMASA) of South Africa has revealed.
IMASA represents a significant portion of the investment industry of South Africa. Its 25 members manage close to R2 trillion in assets, accounting for in excess of 90% of private sector funds under management. The research was undertaken using data submitted to the Financial Sector Charter (FSC) Council, as well as additional information requested from members. Sixteen IMASA members participated, representing approximately 99% (R1,933 bn as at 31 December 2006) of the asset base of the associations members.
"The results are encouraging," said Leon Campher, Chief Executive of IMASA, "as transformation is a key issue for the investment industry and the retirement funds for which we manage assets." The commitment to transformation is evident in IMASA being a signatory to the Financial Sector Charter and represented on the FSC Board.
"To be clear these statistics we assembled for our industry members will not correlate to the industry aggregates to be reported by the Financial Sector Charter Council. This is because a number of asset managers reported as part of their parent group and would be excluded from the FSC aggregate. Undertaking this research enables us to track our process and understand our development areas." said Campher.
The research revealed a strong improvement in direct ownership numbers across the industry. Weighted by assets under management, black ownership grew to 22% in 2006 from 18.8% in 2005, well ahead of the FSC target of 10%.
"We must continue to transform our workforces at all levels to meet the Employment Equity Challenge. Progress during 2006 was good, with an increase of 4.2% of black people at senior management levels to 21% black, an increase of 2.1% at middle management level to 37% black people and an increase of 5.2% of junior management to 57% black. These compare favourably to the FSC targets of 20-25%, 30% and 40-50% respectively.
"The industry has also started to address concerns about black women in executive positions. This has improved from 8% to 13%, while board representation has also improved from 9% to 13% over the year. There has been a 20% increase in black women in management positions since December 2005, with a strong pipeline at junior management levels," Campher said.
"Indeed, at 35.6%, more than a third of the investment professionals currently employed by the investment industry are black. This is a strong increase from 26.6% in 2005," Campher added.
The industry is also procuring responsibly from black empowered businesses; these companies receive 41% of the discretionary spend of almost R1bn. This number excludes stock broking, which can be as much as 64% of total procurement spend, Campher pointed out.
"Transformation is an ongoing process; the higher DTI Code targets mean we are continuing to concentrate on employment equity, but the research did highlight areas that need special focus," Campher said: "Progress of black people at senior and executive levels still needs attention. The industry skills spend is currently at 1.24%, which although shy of the skills development target of 1.5%, is a respectable spend given we are a highly skilled industry with a high salary base."
Finally, learnerships need to be adjusted to meet the graduate needs of the industry.
"Understanding where we are is helping us to focus our interventions. We are launching the IMASA Academy in 2008 to focus on development of investment skills in the industry. We hope to use this as a springboard to further increase the black talent pool. In time, this could be a centre of investment learning for a wider constituency," said Campher.
"We undertook this research not from a Charter point scoring perspective, but because we believe in genuine transformation. We wanted to assist the industry to track and monitor their progress, as well as to target the key interventions relevant for the investment management industry," Campher concluded.
