Last week, I attended the 30th birthday celebration of Coronation Fund Managers. One of the more interesting facts about Coronation is that they have four Chief Investment Officers, past and present, who are still involved in the business and managing funds. A conversation with the four men, about their journeys and lessons, turned out to be the highlight of the event.
The event provided a moment of reflection for me. It is also my 30th year in the investment industry. In 1993 I walked into the imposing foyer of Southern Life to start my career in investments. I still remember feeling small and utterly unqualified for a job I still don’t know how I landed.
When I look back over my career, I too share sentiments and observations, similar to those expressed by Coronation’s old hands (some of whom have decades more experience than me).
The first is that when I started my career, the savings industry was in the early stages of a once-in-a-lifetime growth spurt, partly due to governments and companies starting to shift the responsibility for retirement to individuals. New financial instruments were being created and South Africa was at the forefront of these developments. We were lucky to start our careers in investments at a time when the global investment market was in its infancy.
We must acknowledge this good fortune and admit that the development our industry experienced over the last thirty years is unlikely to be repeated. AI is already re-shaping the industry and the pace of growth will be steep. It will likely benefit software developers and mathematicians, while margins will remain under pressure for most asset management businesses.
Another thing I have observed is the humility of great investors. Financial markets keep one humble. Successful long-term strategies hinge on the probability of being right more than wrong, most of the time. Conversely, this means of course, that a good investor will make many mistakes. Two of the most concerning traits that often foreshadow mistakes are over-confidence and high conviction. Yet, we are often convinced by those very qualities. In truth, humility is a far better signal of a successful and experienced investor.
Looking back, those early days were like the Wild West. Insider trading, front running and all sorts of unethical and discriminatory behaviour were common. I remember my wide-eyed astonishment and discomfort as a naïve, conservative young woman. However, it is good to note how far we have come. Whilst not perfect, we can be proud of the South African savings industry today. It is well-regulated and provides ample opportunity for the general public to provide for their own future financial goals. I’m often reminded of exactly how well-developed our industry is when meeting with international product providers or attending global conferences. I hope that we can find a future balance between regulation and making good financial advice more widely available to the general public.
Reflecting on Coronation as a business, it’s clear that their team’s focus on delivering returns to their investors is one of the drivers of their success. It’s a valuable skill particularly as focus is becoming a scarce commodity. Karl Leinberger, current Chief Investment Officer, quoted Cal Newport’s book ‘Deep Work’ on the loss of focus due to our digital addiction. Like Leinberger, Newport’s book had a profound impact on my own life too. It reminded me to switch off. This is the battle of our time - to protect our mind space.
Considering the last 30 years, I feel fortunate to have been involved in this industry. The continual intellectual rigour and exposure, whilst also aiming for the noble goal of helping people achieve their desired outcomes, has been highly rewarding.
And like many jobs, life even requires resilience and a long-term mentality. At the coal face during tough times, as a financial partner to our clients, we must manage, and be resilient in our own emotions, as well as help our clients. It is the tough times we experience in the financial markets that can set us up for long-term success. Not surprisingly, during these times, we are often unsure and lack conviction. Yet, our beliefs need to be resilient, specifically that diversified risk-appropriate long-term investments are more likely to yield results than untested theories. It is this that helps us grow into good investors – the ability to notice and manage our own emotions.
Not many people stick it out. Not many companies survive. This is why, thirty years of consistently ploughing away with resilience is worth taking a moment to celebrate.
Here’s to 30 years!