Interest in Africa-based Investment Managers Jumps 64% on eVestment in 1Q 2017

As institutional investors and consultants continue to search the globe for returns, acceptable risk and portfolio diversity, their attention is increasingly being drawn to Africa-based asset managers.

As a result, Africa-based investment fund managers enjoyed a strong start to 2017 with increased interest and asset flows from international institutional investors, according to eVestment’s 1Q 2017 data.

Views of products managed by African managers listed on eVestment jumped 64% in 1Q compared with the previous three months, according to the company, while net positive institutional flows reached their highest level since the third quarter of 2013, surpassing $1 billion USD. In 1Q, the major Africa-based beneficiary of increased views on eVestment were South Africa balances/multi-asset products, which saw views jump 313%. Fixed-income strategies also saw views jump about 241%. Views of equity strategies were essentially flat. In fact, views of and asset flows to African managers have been on the rise for the past three quarters (see the chart below).

International interest

The majority of the 1Q’s screening activity and asset flows came from Europe and North America according to eVestment data.

With many developed markets assets priced at or near record highs, coupled with institutions looking to diversify portfolios geographically, now could be the time for African firms to capitalise on increased overseas interest.

Asset managers in South Africa, Nigeria, Egypt and elsewhere on the African continent should take note: Increasing product views in institutional investment databases like eVestment is often a leading indicator of changes to future flows.

The industry internationally is moving to a more data-led distribution model. This creates a more level playing field for African firms trying to grow locally and overseas.

The data:

To take advantage of this increased interest from investors and consultants around the world, African managers should consider re-visiting their distribution and database strategies.

eVestment reviewed 89 Africa-based funds currently submitting asset data to the company and found that those with positive net flows also enjoyed stronger screening activity.

The charts above show that the managers with positive net flows passed screening criteria almost twice as often as managers with negative net flows. At the same time, they saw a lower percentage of failed screens due to missing data.

In short, those with net inflows had data that was more up-to-date, accurate and complete.

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