Coronation Fund Managers, one of the country’s largest asset managers, on Tuesday reported an underwhelming set of results for the year to September, battered by market volatility in the period.
The Cape Town-based company said headline earnings per share (HEPS) decreased 25% to 366.3 cents per share, from 487.9 cents per share in the prior corresponding period.
HEPS is a key profit measure for most corporations in South Africa. The results also show that revenue decreased 12% to R3.7-billion from R4.2-billion reported in the corresponding period.
The company also reported a decrease in assets under management at the end of September with AUM 9% lower at R574-billion against R634-billion reported in the comparative period.
Coronation CEO Anton Pillay said fund management companies are cyclical businesses that are heavily impacted by market movements.
“Our financial results for the period under review reflect the sharp declines seen across all asset classes globally. In this challenging market environment, we experienced outflows representing 6% of our average AUM,” Pillay said.
“This is in line with our expectations and it reflects the realities of a shrinking domestic savings pool. As a large domestic manager, we expect Coronation’s flows to broadly reflect that of the South African savings pool and the economic reality within which it operates.
“Recent changes to regulation 28 will further shrink the available pool of domestically managed assets … AUM as at 15 November 2022 has recovered to R610-billion.”
The company, which was founded in Cape Town in 1993, turns 30 in 2023. Coronation has offices in London, Dublin, Johannesburg, Durban, Pretoria, and Namibia.
Pillay said as the company heads into its 30th anniversary, he is concerned by the plethora of challenges that economies and societies around the world will need to navigate in the years ahead and the consequent impact on people’s ability to save.
However, he said he remains positive about the prospects for client portfolios.
“The steep, and often indiscriminate, sell-off in markets has created multiple opportunities for patient long-term investors. We have taken full advantage of these opportunities and are very optimistic about the long-term prospects for our client portfolios.
“As an investment-led business, our primary focus remains growing the value of the client assets entrusted to us over the long term, rather than simply looking to grow the pool of assets under our management.”
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