South Africa has seen a critical refocus on investment growth in recent months as well as a much needed confidence boost, creating a more supportive environment for private sector investment. This is according to Dave Macready, Managing Director of Old Mutual Wealth and Investments, who says that improving economic prospects under South Africa’s new leadership mean that Old Mutual coming home to list on the JSE next month is well timed.
However, the country needs structural reform if we are to climb out of the current low growth trap we find ourselves in. “South Africa has stopped digging the hole deeper, but we still need to climb out to sustain a level of economic growth to meet our challenges. That said, we are seeing signs of a shift, with recent renewed confidence in the country turning into more consistent policy.”
Macready, who last week accepted the overall award for Best Managed Company in SA for Old Mutual Investment Group from the Top 500 Awards, says that the current environment is creating clear opportunities for long-term sustainable investment for the private sector.
“The signing of 27 new independent power producer (IPP) contracts, after three years of delays, is a critical step in the right direction providing evidence of confidence turning into more solid policy,” he says. “Business confidence takes time and entails trust, but we are certainly heading in the right direction.”
Macready believes that the role that asset managers play in South Africa’s economic future should be reflected in the way in which they put the investment capital of their clients to work. “Responsible investment is a crucial building block for the country, particularly against the backdrop of our current economic environment,” he says. “As asset managers we invest for the long-term and we are constantly searching for sustainable investment opportunities. We pride ourselves in being leaders in Responsible Investing in South Africa and as such, growth and the protection of client assets are our key priorities.”
He points to the more than R12 billion invested by Old Mutual Investment Group to address gaps in social infrastructure, affordable housing and quality education. “We believe in the need to invest with the aim of making a significant impact for the broader national community. Our private equity involvement in toll roads, has created close to 1000 jobs, for example, and we are exceptionally proud of initiatives such as the Early Childhood Development Programme, driven by Cookhouse, an investment in the Old Mutual IDEAS Fund, which aims to provide quality child care and access to education for children between the ages of 0 and 6 years among Eastern Cape communities,” he says.
“As active stewards of capital we strive to deliver low-carbon, resource-efficient and financially inclusive outcomes supported by good governance aligned to long-term sustainable client returns.”
There have been notable examples in the market recently of the impact that poor governance can have on investors. “It is important to understand the ethos of what really drives a company, how employees are rewarded and how they are measured. The cases we’ve seen in the market of late have been stark reminders of the need to apply not only the skill of strong investment talent, but also the principles of responsible investing,” he emphasises.
Speaking about the recent recognition of Old Mutual Investment Group’s standout performance by the Top 500 Awards, Macready believes that the accolade is affirmation that his business is doing things right. “Winning this award is testament to the fact that not only is Old Mutual Investment Group a great place to work, but it is a home for world class talent and intellectual property,” he says.
“We pride ourselves in not only building an investment pipeline in our business, but in recognising that asset management is also all about building an exceptional talent pipeline,” he adds. “Our industry is an intellectually enriching one and it therefore attracts the brightest and the best. Today’s investment professionals are also far more focused on making a difference when it comes to a sustainable impact through their work.
“Ultimately, it is our people that make this kind of recognition happen, and it is our talent, performance and passion for delivering sustainable client investment outcomes that are key factors in ensuring Old Mutual Investment Group is a leading investment manager in South Africa.”