The Association for Savings and Investment South Africa (ASISA) has taken note of the position taken by Futuregrowth Asset Management to suspend loans to six State Owned Enterprises (SEOs) until the governance and decision-making of these entities becomes more transparent.
Leon Campher, CEO of ASISA, points out that the Association cannot, however, express a view on this decision by Futuregowth.
“Investment managers must make their own investment decisions. ASISA is an industry body mandated by its members to deal with industry issues, which include policy, regulatory and legislative matters. The Association cannot dictate where members invest and where not. That would be considered collusive behaviour, which is not only undesirable, but also illegal.”
Campher makes the point that investment managers do not actually own the assets that they manage. All assets under management represent the savings of ordinary South Africans who, via regulated products such as retirement funds, funeral policies, and unit trusts, have entrusted their money to the investment manger to be managed in a responsible manner.
“It is therefore the fiduciary duty of individual investment managers to invest this money where, based on their perception and research, the expected returns come at an acceptable level of risk. ”
Campher states that while ASISA can never get involved in the business decision-making process of individual member companies, the Association has publicly, via the media and Business Leadership South Africa (BSLA), expressed concerns about evident encroachment on the National Treasury.
According to Campher, undermining the National Treasury would have profoundly negative effects on all people in South Africa, with the poor and working class most exposed.
In December last year, following the reappointment of Finance Minister Pravin Gordhan, ASISA issued a statement urging Government to ensure that continuity of leadership in key Ministries is maintained and that the leadership of State Owned Enterprises is properly constituted with appropriate governance structures in place.
At the time ASISA pointed out that this was key in strengthening the confidence of local and foreign investors to partner with Government in funding infrastructure investments.
“We are therefore deeply concerned about the current events involving National Treasury and some of the SOEs,” says Campher.