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We’ve sharpened our focus: Old Mutual Investment Group MD

Tebogo Naledi believes OMIG is now very well positioned to respond to client needs.
Old Mutual Investment Group MD, Tebogo Naledi. Image: Supplied

When Old Mutual Equities and MacroSolutions announced their merger earlier this year, the number of boutiques within the Old Mutual Investment Group (OMIG) fell to three. This is apart from the four other businesses within Old Mutual Investments – Futuregrowth Asset Management, Marriott Investment Managers, Old Mutual Alternative Investments and Old Mutual Specialised Finance.

Fourteen years ago, when Old Mutual Investment Group unveiled its new boutique model, there were 12 businesses in the group. Even more were added in subsequent years.

More recently, however, consolidation and rationalisation within the group have made it appear that the boutique model has for all genuine intents and purposes been abandoned. It is even debatable whether the term ‘boutique’, as it is used within OMIG, is truly reflective of the scale of these operations.

Focus

For new MD, Tebogo Naledi, where the group finds itself now is not, however, a repudiation of the intention behind the boutique model.

“It’s been a long journey of learning and refining,” Naledi said. “I view it as an evolution. An evolution which I think perhaps wasn’t designed as such, but its intent was to get to where we are now.

“I think that what we have now in terms of our structure and focus is what was actually intended by the boutique model. Each of the three boutiques has it own strong capabilities, and they are each very clear about which market need they are serving.”

The three businesses left within OMIG are MacroSolutions, which is a fundamental, active management house; Customised Solutions, which offers systematic and index capabilities; and Liability Driven Investments.

“The term ’boutique’ is one which different people interpret differently,” Naledi said. “We are using the term within OMIG, but really to refer to centres of investment excellence.

“From a process, philosophy and talent point of view, each boutique has its focus and independence. There is no contamination from any other team’s philosophy. That is something we are committed to.”

Performance

Ultimately, any investment business is judged on its performance. Part of the argument for OMIG’s adoption of the boutique model was to create an environment for stronger alpha generation.

The results produced by OMIG’s boutiques have, however, not always been stellar. There are some outstanding long-term performers within the Customised Solutions boutique, such as the Old Mutual Double Alpha fund and Old Mutual Premium Equity fund, available to institutional investors. But the group’s more prominent retail funds have largely fared less well.

“We are an investment management business, which means that investment performance is the product that we sell,” Naledi said. “Of course, there is service, pricing, and how efficiently we deliver that product, but ultimately the thing we are here to produce is investment performance. And across the different capabilities, that has been quite mixed.

“My job is not to be making investment decisions,” he added. “The boutiques will do that.

“My job is to make sure that from a resourcing point of view, a structure and culture point of view, and from the point of view of providing clarity to in terms of client expectations, the teams have what they need to succeed. And, given what we have in place now, I have confidence that we will deliver.”

Business model

Naledi added that given the clear focus of each boutique, and the investment capabilities each offers, OMIG is also now very well positioned to respond to client needs.

“Even though we have structured our teams as independent boutiques, that independence is around investment decisions,” Naledi said. “The business model at an OMIG level is more about having diversified investment capabilities.

“Clients have become more sophisticated in how they structure portfolios, and how they utilise fee and risk budgets. The philosophy of using purely active or purely passive is still there to some extent, but it’s changing. Clients recognise that there is a role for both to play.”

This ability to offer solutions that incorporate strategies across the spectrum is where he believes the strength of the group lies.

“Our business model is about having these diversified capabilities, where the client conversations we can have are rich conversations about really building solutions. We can approach this with a problem-solving mindset rather than as a product-push, because we have these diverse capabilities that can help solve a problem.”

Patrick Cairns is South Africa Editor at Citywire, which provides insight and information for professional investors globally.

This article was first published on Citywire South Africa here, and republished with permission.

COMMENTS   25

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Who was the bright spark who appointed Peter Moyo and how much value did that cost. I hear that he got his R250m golden handshake.

Who was the bright spark who decided to enter the USA in over 10 years ago??

Something is very wrong with big green.

Agree. Avoid them. The competition is way better

My “investments” have given the worst returns of all the big players over the last 25 years..

Being decolonized !!

Several senior management and investment professionals have departed over the past few years with a definite common denominator.

I don’t see any value in this article.

It is common for all companies to sharpen their focus every hour, every day, every week, every month, every year.

Looks like an advert.

Want to know why the share went up when most in its sector dropped?
Look at the sensitive news for the 8th of April.

The share price has recovered better than Standard Bank though.

But it wont fly very soon.

Seems that the support for OMU shares is OMU itself buying its own shares for its directors.

I hope they return value for all these millions of Rands in shares awarded to them.

I’m buying some too.

Old Mutual is —- wel ja — OLD !!!

Old Mutual will sharpen their focus… when my money…invested in your funds GROWS…. and i recover my costs ….

until then your a blunt axe

Old Mutual was founded in 1845. that is 175 years ago. Its done well since day one. Why does it need an “evolution”. Why doesn’t it just flog life and property insurance and be boring yet … moderately profitable and solid?

I’m sure Old Mutual had a better pool of asset management candidates to choose from rather than Khaya Gobodo, and Tebogo Naledi?? Seriously, guys from Afena Capital…a small and poor performing asset management house that relied on being a BEE proposition to get ahead. In the drive for transformation, they have become there own enemies. Your money is best vested elsewhere.

I have not always agreed with you but this is an astute comment.

True that. Astute comment squared.

Afena is still highly reliant on being a BEE proposition without any product innovation. Serial laggards still bartering local, listed equities.

Missed a spot – Afena has explored into the Money Market world.

I deal with Old Mutual regularly and their customer support since the start of the pandemic has been far worse than their competitors, who were also facing the same challenges as they were. I doubt the few new faces will be little more than window dressing.

SPEAKING FOR A FRIEND – I have a few friends who work for OM as advisers and apparently COVID has caused Old Mutual problems in payment of their advisers commissions and has caused their new flagship risk product to be an absolute shambles.
Shame, let’s blame it all on COVID and hope the clients and advisers understand.

I have to agree on that score.Not only is the risk product a shambles,market share in this space has suffered.In this industry which requires strong high energy leadership,the place is devoid of capable leaders at middle and senior level. Some worrying times ahead ,with little planning in evidence.This interview is another indication of a senior person saying nothing of substance.

They are famously known as Old Mut when they debuted on the UK stock market around the turn of the century.

Now its all talk of ALTERNATIVE investments without an inkling of experience or verifiable track record.

We have sharpened our focus to shake down our clients some more.

You admitting you were unfocussed all the time?

This one wont fly so soon, high debt and low volumes.

Plus the recent upward move was due to the share purchases for some staff incentive scheme.

Old Mutual is the only big insurance company trading very well below NAV.

Hope bought your tickets.

More buying of shares for the Directors. Looks like that is all this company does.

End of comments.

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