Could you please introduce Argon Asset Management?
Argon is an investment management business that started in April 2005. It was clear from the get-go what we were trying to build; a premier black-owned and managed investment firm dedicated to creating wealth for its clients. When we started we focussed on the institutional space and have recently added retail.
Our partnership with Schroders allows us to offer global capability. So, if clients wanted to be invested in developed markets outside of South Africa we are able to offer that as a result.
Regarding the Schroders partnership, can you explain why both entities chose to partner with each other?
The key thing is we think similarly about investing and have similar value systems. For a giant in the investment sphere to set up in South Africa, given the nuances it is always wise to partner with a like-minded local company. The partnership allows each entity to leverage each other’s strengths. Argon also provides them with a BBEEE advantage, so it is an easy fit. It is not an equity relationship, neither of us own shares, a technical joint-venture of sorts.
South Africa will always have both positive and negative connotations depending on what you are assessing, but it seems clear is there is a lot of both raw and polished talent. How do you foster this?
Ultimately we operate in an intellectual capital environment. Our responsibility is creating an environment where we can harness the input. A healthy human environment is crucial. Coaching has been interesting for us: investment management is an ego game, so we have to make sure they have the confidence that will see them through tough times. If we harness all the input we pay for, ultimately the client solution is a better one.
“…I like to see our growing assets under management as an indicator of an increase in trust in the business…”
What is deemed worthy of Argon’s attention when it comes to investing your client’s money in certain portfolios?
The starting point is always to understand the client’s objective. A client will come needing to meet a certain ability and will give you a benchmark to beat. What we offer our clients is rigour in terms of selecting whatever investment opportunities exist. In the institutional space it is common to have an investment philosophy and this feeds into an investment process. With the range of opportunities out there it is important to know how you screen.
Scandals seem common in South Africa and impact business. As a result, it can seem daunting to international investors. How important is resilience in this environment?
It’s not just a South Africa-specific issue, but one part of resilience is having a guiding compass. Once we sign up a portfolio management agreement, one of the things we do with our clients is to sit and have a values conversation. This means that the space you have between you and the client is not only governed by the piece of paper. One of these values is honesty. It is important to disclose if something is uncomfortable for you, or have a difficult conversation with a client if the investment is becoming too risky or you’re concerned about exposure, or even if it seems unlikely you’ll reach your benchmarks. Part of this resilience is being able to have these conversations, even with staff.
Obviously the creation of the retail space has been a highlight of 2016. Has there been anything else worthy of note at Argon?
It is a brand new space for us, but a critical one. If you look at how investment product has been generally consumed in the black space in South Africa, the non-life, non-bank asset management offering has not been well articulated. Cultivating an appreciation for our brand and what we do is important.
Any recognition we get is great, but trust is important. When we started in 2005 we had zero assets under management. I like to see our growing assets under management as an indicator of an increase in trust in the business. 32 billion across 44 clients for me says there is a fair amount of comfort with what we represent.
Where would you like to see Argon 5 years from now?
I would like to see ourselves ranked amongst the top 10 asset management firms in the country, and I think our growth is showing us that this is an attainable goal.