SIMON BROWN: I’m chatting with Rademeyer Vermaak, head of systematic solutions at STANLIB. Rademeyer, I appreciate the time today.
We are embracing alternative energy sources, becoming less dependent on state infrastructure, and there are numerous institutions building parallel solutions to the problems that we are facing. Changing tack slightly to different investment strategies that SA equity managers would look to follow, I imagine this is broadly the sort of bottom-up versus top-down sort of strategies where you start that investment process.
On the other side of town is where you find your value properties. There are players that invest in value properties, and these are properties that need a lick of paint, which have never been renovated. But, given the rent that you can receive from this property and the price that you pay to acquire it, it’s a pretty good yielding investment. But it’s not without risk.
RADEMEYER VERMAAK: Exactly. So we think that South African asset allocators diversify the risk to each of these different strategies by allocating to various equity fund managers from a top-down perspective. So they would buy into a quality manager, a value manager, and a momentum or a growth manager. We think that there’s an additional arrow in the quiver by buying an investment process that buys in the Atlantic seaboard – as you so eloquently put it, at that intersection.