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We don’t share Futuregrowth’s views on SOEs: Old Mutual

CEO of Old Mutual Emerging Markets says OM remains committed existing commercial relationships and PPPs with SOEs.
Ralph Mupita, Old Mutual Emerging Markets CEO

In a statement released on Thursday, Old Mutual Emerging Markets CEO Ralph Mupita said Futuregrowth Asset Management’s comments on State-owned entities do not represent the broader views of Old Mutual.

On Wednesday Futuregrowth – Old Mutual’s Fixed Income asset management boutique – said it would no longer lend money to six of South Africa’s largest State-owned companies, on concerns about their oversight and governance. 

During an interview with Moneyweb’s Siki Mgabadeli on the SAfm Market Update, Futuregrowth CIO Andrew Canter said it appears as if government is at war with itself, referring to ther ecent announcement by the presidency that it would create a SOE council, headed by the president, to oversee SOEs. “It puts in question how SOEs themselves are managing their own governance and independence,” he said. To listen to the interview, or read the transcript, click here.

He added: “We cannot rationally take a five to 10-year view on their financial status and that means we cannot give new loans to them. It is not a shot across the bow. It is not a political statement. It is merely saying that there is uncertainty and in the face of uncertainty investors have to be more attentive and ask more questions, and that is what we are doing.”

Mupita said Futuregrowth has a mandate to make independent investment calls on behalf of its clients.

“We respect the independence that fund managers need to deliver investment performance for clients, and believe that a more constructive model of engagement is needed and necessary to build and increase socio-economic development and drive financial inclusion in our country. We will engage the fund manager around these issues.

“Old Mutual values the broad and deep relationships it has developed with SOEs over many years. These relationships have been key in building and increasing socio-economic development and driving financial inclusion in South Africa. 

“Old Mutual believes that public-private partnerships are critical for much-needed and shared growth in South Africa and we will continue to play our part in enabling that,” said Mupita.

“Old Mutual remains committed to our existing commercial relationships and public-private partnerships with SOEs and will continue playing a constructive and value-adding role in capital markets, in both listed and unlisted investments.”

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Ralph you may not share Futuregrowths views on lending to SoE’s but thankfully that yours and probably your management teams views. Your views unfortunately are inconsequential, and , maybe what you should do is suss out the views of your investors in your products – this may well tell you whether your are on a rocky road or not.
There is of course a similarity between OMSA and the SoE’s – your both suffer from a malady of not really having the best interests of your customer at heart

You are so right grahamcr! Give that man a Bells…..sommer 2!

Spot on, well said. Sending you a bottle of Bells!!!!!

Fully agree. There’s such strict laws governing sustainable investment – just this morning cabinet announced a judicial inquiry was to probe SARB and all financial legislation that played a role in “failing to protect the guptas.” (See Business Day)

How on earth does ANY ASSET MANAGER lend in that environment of uncertainty? It’s outrageous! Watch the rand dive today after this announcement!

Not at all influenced by the other business that OM does with all SOEs!!

Let me remind you Ralph that this is not your money. Have you canvassed your investors for their views. Fortunately I took the last of my money out of OM years ago after shocking internal rates of return over many years.

I did likewise – their products stink

Agree cashed in with penalties but so glad I did. Would still be working if I had stayed with them.

I also listened to interview and disagree that OM said it “doesn’t share FG’s views” on SOEs.
What OldM did say was that it fully understands FG’s stance particularly as FG is answerable in terms of the law to its shareholders and investors especially considering that old people’s pensions are at stake when loans are made.

Old Mutual did NOT say FG was wrong in its decision – it merely has a different set of shareholders to OldM to answer to in terms of the law. So each must act according to its own shareholder and investor base.

End of comments.

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