Coronation named Best Africa Fund Manager 2012
10 October 2012 - Coronation Insights
Coronation Fund Managers has once again been recognised as Best Africa Fund Manager at the prestigious annual Africa investor Index Series Awards. “Having been recognised in 3 out of the 4 years since our funds launched is testament to the success of our investment philosophy. This approach is designed to consistently
deliver industry-leading risk adjusted returns,” says Coronation’s Africa portfolio manager, Peter Leger. The Africa investor Index Series Awards are the only international, pan-African awards that recognise and reward Africa’s institutional investors.
Expanding on Coronation’s investment approach, Leger explains the single investment philosophy which is ingrained in the Coronation culture. “We are a long-term, valuation-driven investment house that aims to identify mispriced assets trading at discounts to their long-term fair value.” There are compelling reasons why Africa offers a unique long-term investment opportunity and as a result investing in the region has become a highly competitive space. Coronation is one of South Africa’s most successful asset management companies and their focus in Africa is to deliver a compelling, risk-adjusted absolute return over the long term.
“There are no short-cuts to delivering consistent capital growth from this region. Since the funds’ launch 4 years ago, we have spent a vast amount of time doing in-country research. Simply stated, we believe it is the only way to deliver superior stock-picking, particularly with a focus on minimising down-side risks. The hard work is paying off though, with total cumulative returns in excess of 70% since inception1,” says Leger. As at end September 2012, the UCITS-compliant Coronation All Africa Fund delivered an annualised return of 13.7%2 since inception, while the Coronation Africa Frontiers Fund (which invests ex-South Africa) delivered an annualised return of 15.7%2 since launch in October 2008. Both funds are rated by Morningstar™ with 5 and 4 stars respectively.
Commenting on their outlook for the African continent, Leger says: “Coming off a very low base, we continue to see enormous opportunities in these markets with many businesses trading well below their fair values.” Coronation also suggests that overseas institutional investors are seeing similar prospects for the African
market. Justin McKie, who is responsible for Coronation’s international business development comments: “We have seen an increasing amount of interest in Africa from the largest international investors who acknowledge the region’s potential. We believe the challenge to get the best out of the vast opportunity set is to find an Africa-based asset manager with the right investment approach and resources, which is where Coronation comes in.”
Regarding the management of their Africa portfolios, Leger explains that these portfolios are managed on a clean-slate basis and, as such, they do not use indices as a starting point for building a portfolio, preferring to rely on valuation. “We emphasise stock selection rather than top down geographic allocation or macro themes.” According to him they are also comfortable taking positions away from benchmarks, with these positions being underpinned by convictions from their proprietary analysis.
Cumulative returns since inception to end September 2012 for the Coronation All Africa and Africa Frontiers funds total 70.76% and 79.43% respectively.
Gross of fees in US dollars
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Coronation Fund Managers Limited is one of southern Africa’s most successful third-party fund management companies. As a pure fund management business it provides individual and institutional investors with expertise across Developed Markets, Emerging Markets and Africa. Clients include some of the largest retirement funds, medical schemes and multi-manager companies in South Africa, many of the major banking and insurance groups, selected investment advisory businesses, prominent independent financial advisors, high-net worth individuals and direct unit trust accounts. We are 29% staff-owned, have offices in Cape Town, Johannesburg, Pretoria, Durban, Gaborone, Mbabane, Windhoek, London and Dublin and are listed on the Johannesburg Stock Exchange. As at the June 2012 quarter-end, assets under management total R309 billion. For more information, visit www.coronation.com.
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