Blue Chip Issue 90

BLUE
CHIP
INVESTMENT | Leadership
terms of our investment capabilities, we have a wide range of
local and offshore fund solutions, with various risk profiles. We
consider ourselves a specialist multi-asset investment manager,
with solutions in multiple jurisdictions. In South Africa, we
have locally authorised unit trusts, in the global space we have
UK-domiciled unit trusts, Luxembourg-domiciled funds and
Guernsey solutions; so quite a wide range that speaks to our global
clients’ requirements.
While multi-asset is a key focus area for us, we also have a range
of single-asset class solutions, both locally and internationally,
and specialised skills. In South Africa, these include systematic
strategies, fixed income, as well as alternative solutions, including
thematic investments. In the UK, we’ve got great global fixed
income and direct real assets investment capabilities. For other
asset classes, we choose to execute via our select global and local
range of asset management partners, which includes Robeco.
In the wealth management (retail) space, we are and have
been one of the leading investment platform providers, both
with our local Momentum Wealth platform, as well as our offshore
Momentum Wealth International platform in Guernsey. We were
one of the first linked investment service providers (LISP) in South
Africa offering local and global solutions to our South African
clients, as well as to expat investors in various jurisdictions
around the world. We have a wide range of retirement solutions
in our retail business which are well set up to look after the
retirement needs of clients, including our life, living and hybrid
annuity solutions.
To service our advisor partners well, we have a strong
discretionary fund manager capability under the Equilibrium
brand that speaks to an advisor’s need for managed portfolios.
Lastly, our Momentum Securities business initiates access to
bespoke wealth management needs of high-net-worth clients as
well as institutional stock-broking needs.
As an investment company operating in multiple spaces,
how do you deal with the different sustainability taxonomies
across markets?
As an investment business, we have a key role to play in terms
of ensuring that we help create a sustainable future world for
our clients and the next generations. We follow an integrated
investment approach towards environmental, social and
governance (ESG) factors and responsible investing to help
enable this. Given the multiple jurisdictions in which we operate,
this also means that we are subject to different regulatory
taxonomies regarding ESG.
Global investment managers would prefer one common taxonomy
that applies to all sustainable investments and jurisdictions, but
this isn’t likely to happen soon given different local government
We've always been an adviceled
investment manager.
and regulatory priorities. We are already subject to the Sustainable
Finance Disclosure Regulation (SFDR) in Luxembourg given our
global fund range.
Recently, the Financial Conduct Authority (FCA) in the UK
announced its sustainability disclosure requirements (SDR), which
is different to the SFDR. This introduces complexity and additional
costs in terms of the disclosure requirements when we distribute
funds in multiple markets.
Quite a few fintech AI-type solutions are becoming available
that will help with the reporting requirements for the different
taxonomies and will save a lot of effort and costs but will also
assist in ensuring fair reporting and address concerns with
regards to greenwashing.
Please discuss the role of technology, and specifically AI, for
the future of the investment industry.
I firmly believe an AI-driven technology revolution is underway
that will reset the rules of financial services and the future of
investment managers. The investment industry is not known for
leading technology innovation, and a mindset shift is now required
in this regard. Ignoring this will be at our peril.
The use of new technologies will be imperative to manage
margins in our business as they bring efficiencies to regulatory
and commercial pressures on fees. Our operating models will have
to adapt to ensure they are resilient and future fit.
Also, technology is changing how clients wish to deal with
investment management firms and how they access investments
in the future. We must make sure that we keep pace with that as an
industry. However, any technology solution is as good as the data
that the technology is using. Hence, a big focus for Momentum
Investments is data integrity that would enable and support
various forms of AI-enabled solutions.
Over the years, our Group has invested in several fintechs and
insure-techs through our Exponential venture funds in the UK
and South Africa, which gives us access to new thinking and an
opportunity to see “the Art of Possibility”.
Our FNZ partnership in the wealth management space will
bring a lot of digital capabilities to our LISP platforms in South
Africa and Guernsey.
About 18 months ago, we embarked on a project to explore the
potential use of AI in our investment processes in our UK business.
The intent will be to use this to provide market and asset class
analysis at scale, and to use this as an enabler to assist our portfolio
managers with their tactical investment decisions. While still early
days, we can certainly see the benefit of AI and how this can inform
decision-making of our investment team.
We are a people’s business first and foremost, and we see
technology (and therefore AI) as an enabler for how we do
business and analyse data. Our intent is not to replace our
people with technology. We use technology to provide scale
and capacity and to enhance our decision-making across the
business. If anything, we need to do more and experiment more
and be brave in that space.
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