PROFILE
4
NEWS & OPINION
30 November 2018
SANGEETH SEWNATH DEPUTY MD, INVESTEC ASSET MANAGEMENT
How did you get involved in financial services – was it something you always wanted to do? As a child, it is very difficult to aspire to a career that you are not exposed to. I come from a family that worked with their hands. My dad and uncles were builders. I guess I aspired to someday be like them. My career in financial services is very much by accident. The story goes back to my days in high school. I started a maths club with my girlfriend (now my wife), probably as a means to spend more time together! One of the things we did was publish a maths digest containing maths problems and puzzles to foster interest in maths at school. A lot of the inspiration came from a maths digest published by Old Mutual at the time. At the back of every one of these Old Mutual maths digests was a column posing the questions: “Do you like maths? Have you considered a career as an actuary?” I took two key insights from that article – the first was that it was a career that paid really good money and the second was that it would be a perfect choice given my love for maths. It was a no-brainer! I went on to study actuarial science, which led me here. I have left behind my skills in hanging doors, but you will frequently still find me tinkering in my own home. What makes a good investment in today’s economic environment? I think a good investment is one in which you stay invested for a long time. People have very shortterm time horizons and I believe the biggest value destruction is as a result of investors churning their investments too often. I recently read a research paper that revealed that the unit trust industry average holding period for investments in South Africa has reduced from 3.5 years to 2.5 years over the last ten years – a reduction in the holding period of almost a third in just a decade! Investors have become increasingly obsessed by short-term performance rather than staying the course and allowing their investments to benefit from compound growth.
VERY BRIEFLY
What was your first investment, and do you still have it? My first investment was Steinhoff! It was 2004, and I was super excited to buy my first share. I was getting ideas from portfolio managers about what to buy and Steinhoff, at around R22 a share, came highly recommended. Like many other people who buy shares on a whim, I bought it and then did very little about it. I have neither the time nor the skill set to trade individual shares. I am embarrassed to admit that I still hold it! What have been your best – and worst – financial moments? Best: Buying my first home in Johannesburg in 2000 when interest rates were 18%! I had no idea about affordability or interest rate cycles. Fortunately, interest rates reduced from those levels and I sold that property for more than double what I paid for it less than four years later. It was my first big windfall, until I saw property prices in Cape Town! Worst: Being told by ABSA that my three-year actuarial degree was not professional enough for them to give me a credit card! What’s the best book on investing that you’ve ever read – and why would you recommend it to others? I read books on investing but given how much investment material I read during the course of my work, I prefer to read books that aren’t related to investment in my leisure time. I have just finished Homo Deus – A Brief History of Tomorrow by Yuval Noah Harari. It is an incredible book that opened my mind to the possibilities of what humankind could achieve in the future. It’s a tough read because it challenges everything we take for granted.
UPS & DOWNS
A deal between government, labour and business at last month’s Jobs Summit in Midrand could see the creation of another 275 000 jobs per year. Presently, 9.6 million people in South Africa are unable to find work. The framework agreement of around
80 pages contains interventions that will hopefully help boost the economy. President Cyril Ramaphosa says he will meet every three months with business and labour in a presidential committee to monitor the unemployment crisis.
The International Monetary Fund (IMF) has cut its forecasts of South Africa’s economic growth for both this year and 2019, according to its latest World Economic Outlook Report. The IMF now sees the country’s economy as expanding 0.8% in 2018, down from a previous forecast of 1.5%. The economy is forecast to grow 1.4% in 2019, down
from a previous projection of 1.7%. According to the IMF, “Recent reforms in South Africa, such as measures adopted to tackle corruption, to strengthen procurement, and the intention to eliminate wasteful expenditure, are welcome.”
Garth Napier has been appointed MD of Old Mutual Insure, pending regulatory approval. “Napier’s extensive experience in retail strategy formulation and execution, as well as his solid business management credentials, make him the ideal candidate to lead the continued turnaround of Old Mutual Insure,” the company said in a statement. Napier holds a Bachelor of Commerce (Honours) from the University of KwaZulu-Natal and a Masters in Business Administration from Harvard University. As the MD of Pep Africa, he was responsible for over 330 stores operating across seven countries. Prior to this role, Napier was the MD for the Edcon Speciality Division, comprising five chains with Garth Napier, MD, over 700 stores in total. Old Mutual insure
René Kotzé of PSG Wealth in Pretoria recently received the Top FPSA® Candidate Award 2017 at the 8th Annual FISA Conference in Sandton. The award is made annually to the candidate who achieves the highest average marks for three required modules during the previous year’s FPSA® examinations. Kotzé scored an average of 88% for Law and Ethics in Fiduciary Services, Wills Consultation and Drafting, and Estate Administration. The award consists of a trophy and certificate, a R10 000 cash prize, and registration free of charge to attend the FISA conference at which the award is handed over.
From left to right: René Kotzé, Angélique Visser (FISA Councillor), Eben Nel (FISA Chairperson)
BDO Wealth Advisers have acquired Lepar Financial Services, an independent financial services provider based in Cape Town. Lepar was established in October 2006 by David Lepar, who has been in the financial services industry since 1987. The business advises more than 230 families about 20 retirement funds and a further 100 medical aid members. Lepar says, “For the past seven years, I attempted to find a suitable succession plan that would satisfy the needs of all my clients in the event of my untimely demise. I realised my client base is so diversified that my search for an individual or small operation was not a correct fit. I needed a diverse operation that could not only look after the day-to-day needs of clients but also provide other services, like estate planning and tax advice, under one roof.”