INVESTMENTS: New Investment Boutique, Perpetua Investment Managers, Launches Retail Unit Trust Offering
Recent Gauteng Business News
In an industry heavily dominated by large, established players – the largest 10 of which control more than 80% of the industry’s investments – boutique investment firms are becoming increasingly sought after by South African investors looking for options beyond the household brand names. While many of these large firms have built highly successful and profitable businesses, Perpetua believes investment management should be pursued as a profession and the success of its own firm will only be achieved if it delivers on its purpose of meaningfully growing clients’ hard-earned savings.
Govender, who has 17 years’ investing experience and serves as Perpetua’s chief investment officer, maintains that the ability to focus squarely to one’s specific strengths and competencies is a defining feature of a boutique firm. “In a sea of investment firms that appear to keep broadening their product offerings in the pursuit of growth, we know we don’t need to be all things to all people. We have a clear sense of where we believe we can add specific value and make a difference, which ensures that we don’t get bogged down by unnecessary bureaucracy or business decisions that can often occur at the expense of client outcomes,” says Govender.
In determining whether Perpetua is the right investment manager for your savings, the firm suggests that the following key factors about its structure and approach be considered:
Independent, privately-held ownership, which ensures client interests supersede business or owner interests.
An all-encompassing approach to value investing, which seeks to minimise the permanent loss of client money.
A non-benchmark-cognisant investment portfolio aimed at preserving clients’ savings while constantly striving for differentiated returns.
An open and engaging client experience that ensures the firm and its staff are always accessible, professional and humble.
Value investing firms are obviously not unique in South Africa, but Govender is adamant that Perpetua can still differentiate itself. “One of my key learnings this past decade has been that the narrowness of the South African universe has meant extreme deep value, contrarian investing is a subset of value investing that is very infrequently rewarded in our marketplace, which is especially important to recognise given the risks that are often taken on in pursuit of the style. At Perpetua, we recognise that value investing operates along a continuum and that the reason shares can be purchased below our determination of their value could be due to a variety of investment theses, of which mean reversion (typically the basis for deep value shares) is just one. We are equally comfortable owning out-of-favour shares as we are comfortable owning quality shares with sustainable competitive advantages. The most important determinant of returns will always be the price we pay for a share versus its worth. To differentiate ourselves, we need to ensure we are able to consistently determine a share’s value more accurately than the average investment manager and, similarly, display conviction and a preparedness to not own popular shares, which we believe the market is overpricing. Our nimbleness and agility also mean we can include a wide range of shares within our investable universe,” adds Govender.
By ensuring the firm’s team of experienced and diverse investment professionals concentrate the bulk of their efforts on uncovering investment ideas for clients, Perpetua has pursued an approach of outsourcing key administration and distribution arrangements to best-of-breed service providers. The Perpetua MET Equity Fund and Perpetua MET Balanced Fund have therefore been co-branded with MET Collective Investments and included as part of the company’s MET Premium PartnersTM offering. “In terms of Perpetua’s unit trust funds, it was both prudent and necessary to select a partner with an established and respected brand, extensive and far-reaching distribution network and robust administration system, hence, the selection of MET Collective Investments – part of the JSE listed MMI Holdings,” concludes Govender. “Even at this early stage, the partnership has worked well and created a clear platform from which clients are able to access our funds. Importantly, the partnership also means that Perpetua is able to largely focus the bulk of its time on its core competency of seeking to maximise investment returns for clients.”
Kevin Hinton, head of distribution at MET Collective Investments, says “The partnership with Perpetua provides the opportunity for investors to access a quality investment firm via the vehicle of a well-regulated unit trust. In an exceedingly competitive investment management landscape in South Africa, dominated by the large investment firms, we have no doubt that Perpetua is well positioned to provide investors with market-leading investment returns over the longer term and will find support from those investors wanting to diversify their investments to smaller niche-based boutique firms.”
Business News Sector Tags: Finance|