By shrinking back in silence, they are doing the active management industry, already losing droves of investors to lowe rcost passive managers, no favours. More worryingly though, their lack of response undermines the basis of the savings and investments industry.
South Africans are already poor at saving, demonstrated by low household savings relative to other developing countries. Asset managers should be doing all they can to encourage higher rates of saving, which includes inspiring confidence in their ability to responsibly steward individuals' savings.
When they get it wrong, as many seemingly did on Steinhoff, they should be willing to admit the error and provide sound reasons for why they invested in the company.
Investors are, after all, paying higher fees for the research teams and investment minds in active managers. It is only fair that these investors, and potential investors, are reassured that these fees are not going to waste. Yet, the paltry client communications issued by the likes of Coronation and Stanlib hardly inspire confidence.
The same is true of Old Mutual Investment Group, which manages more than R636bn in assets and simply refused to discuss Steinhoff with Business Day.
Sanlam Investment Management said only that it "continues to monitor developments". All these asset managers held Steinhoff across a range of their actively managed funds.
Coronation, with assets amounting to about R589bn and exposure to Steinhoff in its domestic equity funds, simply ignored requests for an interview, referring Business Day to a statement on the company's website, which said nothing about what the investment case for Steinhoff was.
Similarly fobbing off interview requests, Stanlib provided a paper-thin explanation to clients about what the Steinhoff investment case was - one that a graduate could have cobbled together after reading the first few pages of Steinhoff's annual report. As managers that collectively manage a sizeable chunk of the country's savings, these responses are unacceptable.
But, lest all active managers be tarnished with the same brush, as many passive rivals have been inclined to doing in the wake of Steinhoff's collapse, there were managers that provided well-considered reasons for why Steinhoff seemed a sound investment case. Anchor Capital, Ashburton Investments, Prudential and the various managers managing Nedgroup's fund range come to mind.
Ashburton fund manager Jason Forssman, in a 60-minute discussion with Business Day, explained how Steinhoff had passed Ashburton's investment hurdles. Similarly, Anchor Capital's Sean Ashton rattled off a string of reasons why the manager bought the stock.
Both say that they relied on the integrity of audited financial statements and other gatekeepers, such as credit ratings agencies and bankers - as they must do in making investments.
Their honesty shows up their bigger, more established peers.
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.
Go to: http://www.inet.co.za
