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Press Offices > Fund Managers

Coronation Fund Managers
Press Office Feature : Coronation strengthens commitment to black enterprise development

Company: Coronation Fund Managers
Author:Tracey Goodrich
Email:editor@itinews.co.za
Posted:23 Feb 2006

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Coronation to business relationships with these partners over the next three to five years.

Coronation Fund Managers has named Noah Financial Innovations, Afrifocus Securities, Legae Securities, Vunani Securities, Kagiso Securities and Thebe Securities as the six niche black-owned stockbrokers which will form part of its newly launched Business Support Programme.

Coronation is the fourth largest manager of third-party assets in South Africa, with assets under management in excess of R90 billion. As part of this initiative, 10% of Coronation’s stockbrokerage allocation will be directed to these six partners.

This is in addition to Coronation’s existing brokerage allocation of 44% to black-owned, black-empowered and black-influenced stockbrokers.

According to Thys du Toit, chief executive officer at Coronation, the Coronation Business Support Programme was created to assist in the development of those niche black stockbroking businesses which are currently too small to compete with the full service brokers within the instititutional business.

“Over the years, Coronation has been instrumental in the development of a number of corporate initiatives which have contributed to the transformation and development of skills in the Southern African asset management industry, primarily through skills transfer and business support,” says Du Toit. “The Coronation Business Support Programme is a market ‘first’ which will see Coronation actively participate in the development of black businesses.

The process included an exhaustive and transparent series of tenders and due diligence exercises to handpick the successful six stockbrokers. Our aim is not purely financial allocations, but to provide measurable support and assist in the development of long-term sustainable businesses.”

While not the exhaustive list of criteria by which institutions typically evaluate a stockbroking house, Du Toit explains that 14 potential candidates were assessed towards the end of last year on their business plans, dealing capabilities and BEE credentials.

“We believed that these components would allow us to better understand what black-owned stockbrokers are trying to achieve, and thereby enable us to provide guidance and direction as the business plan rolls out; have ongoing interaction with the companies; support the development of product and services ideas; and, obtain tangible measures on the areas where development is taking place,” noted Du Toit.  A formal bi-annual report back to Coronation is a requirement of all six partners.
 
Sello Moloko, president of the Association of Black Securities and Investment Professionals (ABSIP) states that Coronation has clearly set the pace by implementing a structured and transparent process in an effort to comprehensively address the issue of enterprise development in the stockbroking industry. “This is a welcome and commendable move by Coronation and we certainly hope that there are medium-term plans to raise this allocation significantly above the proposed 10% as we believe there is room to do more,” he says.  

Du Toit concludes, “Our support of niche black stockbrokers is firmly based on the belief that by empowering individuals within the supplier’s company, we can contribute to economic growth through the empowerment of black people who were previously excluded from the mainstream economy. Our success in this regard will be measured by a steadily increasing percentage of stockbroking services allocated to niche black stockbrokers based on quality of service and empowerment credentials.”

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