Assets under the management of Coronation Fund Managers, the giant independent fund management company, surged above the R 100 billion mark as it firmly tried to remain as the second largest fund management company in South Africa and to also widen its footprint across the southern Africa region.
In its financial year results to the end of September this yea, the company said it had reached “a significant milestone” when assets under its management surpassed R100 billion.
Income from fund management activities increased by 16 percent to R294 million and headline earnings per share increased by 21 percent to 52 cents per share. Headline earnings per share, after adding back the non-cash share-based payment charges (in terms of International Financial Reporting Standards IFRSs), amount to 66 cents. A cash distribution of 53 cents per share would be paid, an increase of 47 percent over last year.
“The strong results once again confirmed the company’s position as a leader and innovator in the South African investment management industry,” said the Chief Executive Officer, Thys du Toit. “Strong domestic markets and a strategy firmly focussed on growing a sustainable business again combined to produce an impressive set of financial results. This strong financial performance is despite short term relative investment underperformance.”
Coronation has also been successful in creating a culture of ownership among staff, who own an effective shareholding of 28 percent in the business. The shareholding is inclusive of the Imvula Trust, the company’s black staff empowerment initiative. The net asset value in the Imvula Trust currently amounts to R93 million.
Du Toit said Coronation’s culture of staff ownership enhances the business’ core objective of delivering investment excellence.
“The staff shareholding initiatives have reinvigorated the company with a spirit of ownership and allow for the further alignment of interests. This, we believe, will benefit our clients, staff, shareholders and all other stakeholders. This provides further strength to the long-term sustainability of the business,” he said.
It said in terms of creating broad-based sustainable black economic empowerment, Coronation were given an “A” rating by EmpowerDex, the independent research and rating agency. This is the second time in two years that Coronation has received an “A” rating.
Institutional assets under management grew by R13 billion to R75 billion with new client mandates across equity, fixed interest and hedge fund offerings.
Coronation’s flagship domestic balanced fund portfolios performed strongly over the longer-term, ending in third position in the Alexander Forbes SA Large Manager Watch for the three and five year periods.
Coronation’s fixed interest franchise produced an exceptional performance, which was reflected in the upper quartile position within the SA Bond Manager Watch.
“Our Granite Fixed Income Fund quadrupled in size and received the Symmetry Hedge Fund Award for the best performing Fixed Interest Hedge Fund in 2005,” Du Toit explained.
Domestic retail assets under management grew to R17, 8 billion. The range of managed funds and the Strategic Income Fund once again attracted the greatest proportion of net new inflows of R2, 1 billion.
Coronation’s investment excellence was recognised and rewarded by industry peers. In 2005, the company was awarded the coveted Raging Bull Unit Trust Company of the Year for the third time in four years. For the 12-month period to September 2006 Coronation was placed second in the PlexCrown unit trust ratings survey.
Coronation also received a total of 14 individual fund awards and was again ranked ‘the best provider of retail asset management services’ in the PwC Strategic and Emerging Issues in South Africa Banking survey.
International assets under management currently total US$1, 2 billion. All funds in the range performed well despite South African investors having largely avoided investments into global markets in recent times. The Coronation Global Equity Alternative Strategy Fund, which has become one of the largest and longest-running specialist global long/short fund of hedge funds in the world, also celebrated its 10th anniversary with assets of US$438 million under management.
“We are building a long- term sustainable business focused exclusively on fund management, which we believe will extend beyond financial market cyclicality. We will continue to focus on delivering investment excellence for the benefit firstly of our clients and ultimately our shareholders and staff. We are excited about our future,” said Du Toit.