Going from being a scientist at De Beers to the world of asset management in your 30s, with several detours in between, is not something most professionals would dream of doing.
But Mzimasi Mabece, head of fixed income at Melville Douglas, says his problem-solving science skills have helped clients to weather storms in financial markets.
We met for coffee at Villa 47 in Cape Town to chat about the investment climate and what makes the Eastern Cape-born professional tick.
Mabece said South Africa found itself in a fraught investment environment, with load-shedding weighing on productivity and international inflationary pressures driving up costs for households and businesses, all while Russia's war with Ukraine continued.
Mabece moved to Standard Bank's Melville Douglas unit in 2017 as head of fixed income. Melville Douglas has offices in Johannesburg, Cape Town and an offshore office in Jersey.
Mabece said that in recent years there had been no shortage of “black swan events”, but Melville Douglas helped its clients weather these storms by taking a data-driven approach to investment and asset management.
“Any smart investment professional needs to remain calm under pressure. Take the events as they unfold and ask yourself what this particular event means and what its affect on prices is.
“In the world of investment it becomes very difficult not to panic when prices are moving against you but I think what is important is to understand an event as it unfolds and look at how the players are responding. I think your worst enemy in these uncertain times is panic,” said Mabece.
The biggest issue for South Africa, hands down, was load-shedding, which had a particularly disruptive effect on small businesses. The government’s response to the energy crisis was crucial, he said, and there had been some progress in giving businesses permission to generate their own power and in cutting the associated red tape.
Mabece grew up in Sata and went to the University of Cape Town, graduating with a BSc in chemistry and mathematics.
His studies at UCT were sponsored by De Beers, after which he did in-service training and worked for the company in metallurgy.
“So, if you ask me what my profession is, I’m a scientist. That’s what I am,” he said.
His career then took him into the pharmaceutical and packaging sectors — he worked as a materials scientist at Nampak — before switching course entirely. Mabece joined Sanlam Investment Managers in 2003 through an investment professional development programme, “an intense introduction to investment management”, during which he was rotated among different asset classes for 12 months.
“So for me, fixed income was an actual fit. I spent five formative years of my life at Sanlam as a quantitative fixed-income analyst,” he said.
He credits his mentor Adam Roff for sharing his technical skills with him during this time and expressed gratitude to Robert Roux for having the confidence to take him on board.
He said what he does now is not so different to conventional science, because all decisions should be data-driven.
“So, you have to say outside the box and you have to innovate — and that’s what investment is about because no two days in investment are the same.
“In my 20 years in investment, I have seen so many black swan events. You can talk about the global financial crisis, you can talk about Covid. You don’t plan for those things, but you need to respond and make investment decisions in that environment,” said Mabece.
He had stints at Old Mutual Personal Group and Prowess Investment Managers. He then joined Mvunonala Asset Managers; but within a year the holding group ran into difficulties and was put under curatorship.
“What is important about all of that, given the controversy, is that the asset management business was given a clean bill of health, and the problems that were there were actually a holding company issue,” he said.
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