Momentum ‘highly likely’ to resurrect RMB Asset Management

It is ‘highly likely’ that Momentum Metropolitan Holdings (MMH) will move back into direct asset management, said Jeanette Marais (pictured), CEO of Momentum Investments.

Speaking to Citywire South Africa after the release of the MMH interim results to December 2021, Marais said that the group has a profitable linked investment platform business, with R225bn under administration. That makes it one of the big four in South Africa.

It also has a growing DFM, which now has R15bn under management – from R2.5bn four years ago – as well as an established institutional multi-manager. Yet MMH only has a marginally profitable unit trust business.

‘It’s no secret that the serious money in investments is in direct asset management businesses, Marais said.

Momentum Investments had healthy operating profit for the period of R489m, about a third of the entire groups normalised earnings. But 59%, or R267m, is provided by retail guaranteed life annuities.

In contrast, the entire platform and multi-management cluster provides just 29% of profit, or R140m.

Momentum used to own RMB Asset Management, a successful third-party asset manager. But after the unbundling of Momentum from FirstRand in 2010 – and the simultaneous merger with Metropolitan Life – then group CEO Nicolaas Kruger took the decision to move in the direction of multi-management.

Marais said that MMH still has pockets of active management. It has a fixed income team under former PSG portfolio manager Ian Scott, a listed property fund run in-house, and still runs a number of ‘legacy’ equity products through Momentum Securities. It owns 40% of BEE manager Aluwani, but this is considered to be an arms-length investment, she said.

Marais said that Momentum-branded funds account for less than 20% of the assets on the Momentum platform.

‘We are really an independent platform for now, as we are not trying to steer advisers towards our in-house range.’

Marais said that there had not been a final decision on whether to go ahead with returning to full service direct fund management. But since Hillie Meyer had become group CEO in 2018, the issue had often been discussed by the management team.