When thinking about the characteristics of a good assest manager, it seems to come down to knowledge, philosophy and hard work.
Cannon’s chief executive officer Geoff Blount says passionate people are an important part of the mix.
He says their managers need to be patient and always looking for long-term results instead of short-term gains. “This will make for a sustainable and profitable asset manager,” he says.
“It is important to differentiate between an asset manager who is successful for shareholders and one that is successful for clients. There is a potential for conflicting interests between the shareholders’ desire for greater profit and dividends and investors’ desire for superior returns.”
Sanlam Investment Management MD Armien Tyer says it is important for an asset managers to understand the kind of risk they are trying to manage. The most important kinds of risk which need to be managed are business risk and investment risk.
“The best way to manage these are broadly: to understand who you are; who your clients are and what they want; what your value proposition is and the business model to achieve it; stick to the core of what the business does well; implement risk management systems; and employ the right people.”
He says asset management is also highly dependant on talented people, so managing staff well and appropriately is a critical risk management function, along with a sound investment philosophy that is adhered to over time, talented staff, correctly organised and incentivised, and good systems.