31 October 2021
INVESTING
Prudential Investment Managers gets a new identity BY BERNARD FICK CEO, Prudential Investment Managers
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e’re very pleased to announce that after a very successful 27-year history of operating in Southern Africa, Prudential Investment Managers will be changing our name to M&G Investments before the end of 2021. The name change reflects our return to being majority-owned by M&G plc, the London-listed global investment manager that has been our largest shareholder since
our founding. We will be working even more closely with M&G going forward to take greater advantage of their global scale and expertise, with the goal of further enhancing our clients’ investment outcomes. M&G has around R7.3tn (GBP370bn) in assets under management, serves over five million clients and operates in 28 markets around the world. Our ownership and identity changes will have no impact on the way Prudential’s unit trusts or institutional mandates are managed. Our consistent investment process and philosophy remain the same. Equally, our local investment team and management structure remain unchanged. Our existing teams of experienced portfolio managers continue to be backed by a team of analysts focusing on specific sectors and companies. Now, however, they will benefit increasingly from M&G’s global experience. The small 0.13% increase in M&G’s ownership (to 50.12%) has not impacted our black empowerment rating – in fact at the end of July we received our first-ever FSC Level 1 B-BBEE rating. Prudential’s B-BBEE shareholding is now 31.4%, and when M&G’s strategic
stake is excluded, 63.0% of our South Africa-resident shareholding is now owned by black people across our black empowerment partner Thesele Group and staff shareholders. M&G and Prudential share a similar fundamental and valuation-based active investment process. These days, successful investing requires global expertise with a global perspective. Return opportunities come from myriad sources that can best be identified by teams of experts who combine their knowledge to deliver outperformance for clients. These changes will give our clients access to global best investment ideas and solutions that have proven to be successful, including broad global investment themes and cutting-edge, technology-driven solutions. Examples of these span areas as diverse as: Machine-learning (AI)-driven funds; sustainability- and impact-focused funds; international private equity; funds targeting global listed and unlisted infrastructure and credit; and ESG-centric, positive impact and climate-focused solutions, among others. Our corporate names throughout the
“The name change reflects our return to being majorityowned by M&G plc” Prudential Southern Africa group will be changing, including subsidiaries in Namibia. For example, our main investment management company, Prudential Investment Managers (South Africa) (Pty) Ltd, is in the process of being renamed MandG Investment Managers (Pty) Ltd. Our website and email domains will also change, from prudential.co.za to mandg. co.za (in South Africa) and from prudential. com.na to mandg.com.na (in Namibia). We are proud to have been operating under such a historic and globally successful brand as Prudential for the past 27 years in Southern Africa. As this chapter closes and a new one opens, however, we are looking forward to taking advantage of the new opportunities open to us through M&G, which is an equally respected business around the world. As always, our aim remains to deliver even better returns to investors going forward.
New structured product offers growth and capital preservation
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olatility has characterised the global investment landscape since COVID-19 first emerged in early 2020. This global uncertainty heaped additional pressure on local investor returns amid weak domestic fundamentals and legacy structural impediments to economic growth. In response, Investec has launched International Titans Basket Limited, a structured fiveyear investment that will offer local investors global equity exposure for diversification and growth, along with a USD capital preservation benefit. The company, which is incorporated in Guernsey and is listed on the Bermuda Stock Exchange, aims to return at least 100% unlimited upside participation at maturity in US dollars derived from growth in the MSCI World 4% Decrement Index. “This structured investment offers a suitable rand hedge for sophisticated investors who want to protect their capital in US dollars by the acceptance of the credit risk of the issuing Bank and reference entities,” explains Japie Lubbe, Consultant at Investec. The principal preservation in International Titans Basket Limited is in
“Decrement indexes have gained popularity following the COVID-19 outbreak”
US dollars by means of an Investec Bank Limited US dollar-denominated credit-linked note (CLN), which proportionately references the subordinated tier 2 debt of seven reference entities, which are four offshore and three local banks. This credit reference to subordinated debt represents a claim that ranks behind all depositors and other senior creditors. Decrement indexes have gained popularity following the COVID-19 outbreak as a way to remove some of the dividend forecast risk experienced during the pandemic after dividend yields fell significantly. “Utilising this index results in enhanced option pricing, while also minimising overall costs, which ultimately benefits investors as they can get unlimited upside to the index performance with principal protection,” adds Lubbe. Furthermore, the index includes a broad range of large and mid-cap companies across 23 developed market countries, predominantly from North America, which accounts for over 70% of the index’s country weight, and Europe. “This index composition provides investors with diversification across multiple geographies and industries, which offers access to numerous growth opportunities and a spread of risk,” continues Lubbe. “And US and European markets remain at record highs as economic activity continues to ramp up on the back of more advanced vaccination rollouts.” There is significant liquidity in the market, with
Japie Lubbe, Consultant, Investec
extremely low prevailing interest rates making cash and bond investments limited alternatives. Amid the prevailing uncertainty and potential volatility related to the COVID-19 pandemic’s progression around the world, investors also want an element of capital protection in their diversified portfolios. “The threat posed by new variants and an uneven global recovery necessitates a defensive slant in every investment strategy, without compromising potential returns,” says Lubbe. Investors require a minimum investment of $19 000 for B Class USD shares, or AUD25 000 for A Class AUD shares. “Local investors can leverage various offshore investment avenues to access the investment, including their SARB-approved offshore allowances, or via asset swaps that make use of the foreign portfolio investment allowance,” he adds. The closing date for investments is 11 October 2021.
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