ARGON ASSET MANAGEMENT
ARGON ASSET MANAGEMENT
A Proudly African
Approach to Investments
PRODUCTION: Timothy Reeder
From offices in Cape Town and Johannesburg, Argon Asset Management has grown to become a leading owner-managed investment management company, focussed on providing investment management services for institutional investors.
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INDUSTRY FOCUS: FINANCIAL SERVICES
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Argon Asset Management prides itself on being an active, research-driven investment management company, committed to crafting a trusted partnership built on mutual understanding. Its belief is that value unfolds over the medium- to long-term, and Argon therefore aims to build partnerships with its clients designed to be long lasting.
Africa is, after all, rife with opportunity to be capitalised on by an insightful, able company such as Argon. The continent currently represents some 15% of the world’s population, but contributes just 3% of the world’s GDP and less than 1% of the world’s stock market capitalisation. However, the situation is changing and what is being observed is a constant
// ARGON ASSET MANAGEMENT IS AN AFRICAN INVESTMENT MANAGEMENT FIRM WITH GLOBAL STANDARDS // In large part, its success has been its ability to straddle being both a proudly African company and having benchmarks recognised worldwide.
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increase in demand for goods and services. The need of financing in the real economy is therefore becoming increasingly necessary with sound financial sectors and
fund industries developing across the continent. Although some of these are still in their infancy, this is a tangible sign that these new needs are beginning to be met. Africa presents an exciting opportunity and as wealth continues to increase, more domestic investors naturally emerge. Improvements in regulatory frameworks are also enticing foreign investment and distribution, and it is predicted that traditional asset management will grow at a compound annual growth rate (CAGR) of 9.6% across a number of those African nations termed ‘more developed.’ Founder, Mothobi Seseli sums up how Argon has set about differentiating itself from the completion to take full advantage of these developments. “Argon Asset Management is
ARGON ASSET MANAGEMENT
an African investment management firm with global standards. Since we started operating in April 2005, we have been crystal clear on what it is we want to achieve: investment success on behalf of our clients,” he explains. “There were a number of us that came into this business together, all essentially black investment professionals who have been in the industry for many years and had built certain profiles and reputations, seeing the opportunity to participate in this space. We believe that in a dynamic environment such as this, diversity is key and that it can be a source of advantage. We have certainly embraced this as a firm.” As Seseli continues, Argons’ progress has been guided by a firm set of principles designed to guarantee success at every turn.
“There are a number of pillars that uphold what we do, foremost among which are our global standards to which we always adhere. In addition, we strive to deliver beyond the benchmark; we are a wealth generating power. The third key element is recognising the value of the relationships we have with clients and the broader stakeholder community. “Without the trust we have, those relationships cannot exist, and so we continue to spend a significant amount of time and effort developing them and only then comes this trust. Finally, transformation is the all-important ability to recognise that our environment is increasingly a fastmoving and global one, and so we have to be adaptable and able to transform rapidly.”
We spoke with Investment Management CEO Manas Bapela, who began by taking us through the steps that have led him to his current position. “My background is as a mathematician, primarily at the University of Pretoria having returned from the USA from my undergraduate studies,” he says. “After some years of teaching at this institution I moved to Standard Bank Treasury as a Quantative Analyst, and then spent about eight years with a different asset management firm before being recruited by Argon Asset Management, initially as Head of Multi Asset Class. I went on to become their Chief Investment Officer, and this April I was made CEO while retaining my position as CFO.” Bapela details that, while
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INDUSTRY FOCUS: FINANCIAL SERVICES
Manas Bapela - CEO
the past 12 months have held challenges for Argon familiar to all those operating within this space, crucially, this company knows exactly what to do to keep building far into the future. “2017 has been a challenge for Argon in terms of increasing assets under management,” he says, “but in response we have been beefing up on other strategies, such as
retail, to grow these assets. From a product performance point of view it has been relatively good, in relation to client benchmarks.” The retail sphere is going to be central to Argon’s growth over the coming year, Bapela explains. “We are looking into firming up on our retail strategy so that we can attract retail investors into our asset management; it’s an area where we
// WE REALLY ARE INVOLVING OURSELVES AS MUCH AS WE CAN IN COMMUNITIES TO UPLIFT OUR YOUNGSTERS IN A VARIETY OF WAYS // 6 / www.enterprise-africa.net
want to see ourselves doing well so that we do not rely heavily on asset flows from institutions only. We will be looking to offer retail products for others to invest in, to grow our assets under management by attracting people who wish to invest in it. We are looking to get on board individuals rather than large companies, by which I mean people coming to us through an investor who have been nudged our way by an advisor who themselves have money to invest. “We also hope to see reasonable growth coming from institutional investors, which is currently the
ARGON ASSET MANAGEMENT
largest part of our book; we have seen asset consultants starting to upgrade us to mainstream, and so we hope that 2018 will bring even better results in terms of our allocation of larger assets.” This bid for growth is already being bolstered by a commitment to ensuring that Argon has the correct personnel on board, according to Bapela, although perhaps not in the traditional way. “The bulk of investment or resources needed to run a retail product is taken up by a Management Committee” he tells us. “In our case, we are achieving this by using what we call cobranding. As such, we approach a company who can offer a MANCO, and pay them a fee to perform this role. That way, we avoid having to
invest heavily into the staff that runs the Management Company; we are a small firm that is not ready to have its own MANCO, but we can still use these partnerships to achieve the same effect. Plus, these can be long-term relationships, which is even more advantageous.” It is abundantly clear that solid, lasting relationships have been a mainstay in Argon’s history. Bapela concludes by giving us some detail as to the company’s commitment to giving back, through investing into the youth of the country and beyond. “We believe that as responsible citizens we want to give back as much as we can,” he starts, “so social impact investing is one thing we will look to streamline amidst our growth plans. “The aim will be to get more
entrepreneurial spirits coming through, so that we help grow the economy and create jobs - we aspire to give hope and opportunities to these people. We really are involving ourselves as much as we can in the communities in which we exist to uplift our youngsters in a variety of ways.”
ARGON ASSET MANAGEMENT 021 670 6570 www.argonassetmanagement.co.za
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AFRICA
THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS
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Issue No.65
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Journey of a
Lifetime
Exclusive interview with CEO Andrew Darfoor ALSO IN THIS ISSUE:
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ENTERPRISE AFRICA
DECEMBER 2017