Why a Black Asset Manager Incubation Program?

The incubator program was launched in 2007 in response to:

1. the shortage of the number of Black asset management companies in South Africa; and
2. the lack of a sustainable model to grow Black investment talent and skill in South Africa, which nurtures the managers yet protects retirement fund investors against the pitfalls of 'unproven' incubation.

Investing retirement fund assets demands prudence and process, thus the need for an investment vehicle that gives Trustees the required comfort and value whilst allowing retirement funds the opportunity to support development within the industry. Notwithstanding the opportunity to invest with premium untapped Black investment talent.

Key features of the Black Asset Manager Incubation Program

• The role of the Incubator is to source premium Black investment talent, create seeding opportunities for start-up and emerging Black fund managers in their early stages of growth and assist these managers grow their businesses and achieve the critical mass required for long term sustainability. Once sustainability has been reached, managers graduate from the Incubator to make room for new managers seeking early stage support. Following graduation the manager joins the ranks of other mainstream mature managers in SA.
• Incubation requires specialist skills and processes which go beyond just a ‘hand-out’ of assets to fund start-ups and emerging managers. 27four provides the environment to ensure that start-ups and emerging managers are successful. Our model is designed to help the managers transition into credible institutional players through the provision of ongoing guidance and support.
• We have specifically addressed investor concerns regarding the risk of investing in managers with unproven track records and as yet undemonstrated skill, by employing stringent risk management controls and a comprehensive DAILY performance monitoring plan that continuously monitors mandate compliance. It is a responsibility that requires rigorous oversight and monitoring and evaluation that is more comprehensive than is required with mainstream asset managers.

Selection process

Potential candidates are put through a rigorous due diligence process that involves a thorough evaluation of their skill and offering. Managers must satisfy our selection criteria and pass through our internal Investment Committee evaluation process before being considered for the Incubator program.

Selection criteria include:

• Onerous BEE credentials.
• Candidates must also display a long term commitment, have a definite definable edge and have the necessary entrepreneurial aptitude to manage and to grow a business.
• Candidates must have a successful verifiable historic track record.

27four Black Asset Manager Offering

1. Multi-manager
   The Incubator identifies and supports Black investment skill and talent across asset classes. The following multi-manager building blocks comprising a group of diversified premium Black investment talent are available for institutional investment:
   • Specialist equity
   • Fixed Income
   • Cash
   • Hedge funds
   • Listed Property
   
   
2. Customisation options
   In this case we will tailor a solution based on a retirement fund’s unique requirements.
   
   
3. Other ad-hoc services
   • Assist trustees with drafting a BEE policy in line with the long term goals of the retirement fund.
   • Provide trustees access to our BEE fund manager rankings and research following in-depth on-going due diligences.
   
   

For more information on our Incubator program services, please contact us.