Coronation Fund Managers is bracing itself for an extended period of outflows as the country's savings and investment industry shrinks.
Coronation on Tuesday reported a moderation in net outflows year on year from 4% to 3% of average assets under management (AUM) in the six months to end-March.
The active asset manager, headed by Anton Pillay ended the interim period under review with AUM of R677bn, up 9%.
Despite the slowdown in outflows and growth in assets in the period under review, Coronation is not popping the champagne yet, warning that outflows will remain a feature of the industry for the foreseeable future.
“While this is encouraging, we note that the SA savings and investment industry has been contracting for well over a decade,” Pillay said.
“This is due to high unemployment, significant indebtedness and low economic growth, among other factors. We expect industry outflows to continue until we see sufficient economic growth to reverse these trends.”
Pillay attributed the group’s growth in AUM to the outperformance of its funds, on a consistent basis.
The interim results show that from the end of March, 92% of the group’s funds have outperformed their benchmarks since inception.
The R677bn in AUM reported on Tuesday marks stellar growth for the group. The AUM has grown by R632bn since 2000 — with 40% of its AUM now managed by black professionals.
Pillay expects further growth from the group that has recently become one of the most transformed companies in the asset management industry.
Nearly 100% of the company's shareholders who attended its extraordinary general meeting held in November voted in favour of a broad-based empowerment deal which resulted in 52% effective black ownership of the business.
Pillay said the ownership makeup will allow the company to compete for both private and public sector mandates it could not previously bid for.
“We continue to maintain our transformation commitments throughout our business. We firmly believe that a diverse and inclusive workplace provides us with a competitive advantage and is a catalyst for our continued success,” he said.
The company grew fund management earnings per share by 8% in the first half, despite heightened market volatility in the period.
Fund management earnings per share attributable to ordinary shareholders were up 8% at 200.2c.
Fund management earnings are used by Coronation to measure operating financial performance, which excludes the net effect of fair value gains and losses and related foreign exchange movements on investment securities held for seeding products.
Revenue increased 8% to R2.037bn, while headline earnings per share (HEPS) rose 2% to 205.1c. An interim dividend of 200c per share was declared.
The six months under review were marked by heightened market volatility, as the US administration’s stance on trade tariffs and protectionism created uncertainty. In SA, these global tensions were worsened by disagreement within the government of national unity, driven by dissent over the 2025 budget, it said.
“We have delivered solid interim financial results under these challenging circumstances. Our clients continue to benefit from our globally integrated research capability, active asset allocation and stock picking, as well as excellent client service,” the group said.
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