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NEWS & OPINION
30 April 2018
PROFILE CRAIG SHER HEAD OF RESEARCH AND DEVELOPMENT, DISCOVERY INVEST
How did you get involved in financial services – was it something you always wanted to do? Growing up, I actually had very little interest in financial services. I always thought I would choose medicine as a career path. It was my father who encouraged me to study actuarial science, and it was through this that I became deeply involved in the mathematics of finance and its application. As I studied this, I realised that financial services is probably one of the most powerful enablers of the betterment of society. It can arguably make one of the most material and positive impacts on people’s lives. What makes a good investment in today’s economic environment? Despite what one may think about having the right short-term investment views to cater for today’s environment, I strongly believe that good investment outcomes rely more on having the right behaviour in place. If you look historically at how much people invest, it’s far too little and it’s predominantly done after the market has already performed well. And then after markets fall, people tend to withdraw their money.
It seems we are hard-wired to make poor investment decisions. A good investment outcome relies on the right behaviours: having a disciplined non-negotiable savings plan, having the right long-term views and sticking to them. It obviously helps if these habits are formed from a young age. What was your first investment and do you still have it? My first investment was when my parents invested R50 in a bank account when I was born. I still receive interest each year. What have been BITCOIN IS your best – and worst – financial NOT PART moments? OF MY OWN My best moments revolve LONG-TERM around when I see people who have made the right SAVINGS financial decisions upfront STRATEGY and are reaping the longterm rewards. My worst moments are when I see those who had the means, but have delayed or made the wrong decisions for short-term conveniences that they thought were important at the time. They will probably live to regret those decisions for many years. My focus at Discovery Invest is building incentive structures that encourage the right types of savings behaviour, and it is extremely rewarding to see these having a real and tangible impact on savings levels and outcomes for so many people. Do you own Bitcoin? If not, why not? I do own a tiny fraction of Bitcoin. From my point of view, I generally invest a very small amount in a range of alternative structures to understand their workings. That said, Bitcoin is not part of my own long-term savings strategy. I think that currently, it should not be considered part of a responsible financial plan.
UPS & DOWNS Amazon has passed Alphabet and is now second to Apple in the list of the most valuable companies in the world. Last month, Amazon’s shares rose, lifting its market value to $768bn. Meanwhile, Alphabet shares dropped and the company is now valued at $762.5 bn. While tech mega-caps have rallied in the past year in the US, Amazon’s performance was the best – its stock has surged 85% over the last year. Amazon has been popular amongst
investors who believe that its growing cloud computing business will supply the cash needed for investments in original content, physical stores and warehouses.
Facebook’s Mark Zuckerberg lost $6bn in stock value the day after Cambridge Analytica’s data misuse was disclosed last month. Cambridge Analytica uses data mining, data brokerage and data analysis with strategic communication for the electoral process. The company was involved in Donald Trump’s presidential campaign as well as
the Leave.EU campaign for Britain’s withdrawal from the European Union. In March, media in the US and Britain reported on Cambridge Analytica’s use of personal information, tied to 50 million Facebook users, without permission.
VERY BRIEFLY The Hollard Insurance Group has announced the disposal of its stake in Cedar Employee Benefits to NMG Benefits, the South African arm of the international NMG Group. “Cedar is a profitable and very well managed employee benefits business that provides valuable services to retirement fund and healthcare clients throughout South Africa,” NMG’s CEO, Jacky Mathekga said. “I look forward to welcoming the Cedar management and all its employees into NMG, and to working together for the benefit of all our customers.” The combined NMG Benefits and Cedar businesses will have over 1 000 corporate clients, with some 450 staff looking after around R200bn in retirement fund assets. This makes NMG the second largest employee benefit operation in the southern hemisphere. Metropolitan Health Group (MetHealth), Thebe Health Group (Thebe Health), Workerslife Group (an affiliate of the PGC Group of Companies) and Validate (a group of healthcare industry players) have entered into a strategic partnership where Thebe Health and the Validate/ Workerslife consortium will own a 49% stake in MetHealth. MetHealth (a division within the health solutions environment of MMI Holdings Limited) administers the Government Employees Medical Scheme and provides wellness services to a number of clients, covering over 1.8 million lives. The key strategic focus of MetHealth is to achieve financial wellness for public sector communities by enabling and delivering sustainable integrated outcomes-based healthcare solutions as a transformed organisation. Aon South Africa has acquired Niche International Brokers, an independent specialist trade credit brokerage with operations in Johannesburg, Cape Town and Durban. The deal sees a transfer of Niche’s client accounts and team of trade credit specialists to Aon, effective 1 March 2018. Niche’s current owner, Ken Jedlinski is also joining Aon, providing continuity for clients and colleagues alike. Sanlam Private Wealth has announced the appointment of three new nonexecutive board members. Karabo Nondumo, Thobeka Sishuba and Anton Raath have joined the company’s board in line with its strategic objective of transformation and of growing the business in new markets. Daniël Kriel, Chief Executive of Sanlam Private Wealth, says the new board members bring a powerful mix of skills and expertise and he looks forward to working with them to steer the firm – that manages assets worth R240bn and has a global footprint in five countries – into the next phase of its growth.