Futuregrowth Asset Management is a specialist investment company that manages around R194 billion of assets on behalf of our investors. Our large team of investment experts manages the full scope of interest bearing products, from money market funds to yield enhanced bonds, as well as a range of development funds. / Investment strategy As asset managers we aim to maximise long-term investment performance for our clients, which we do by identifying, sourcing and managing all potential sources of outperformance in our funds. Key tools are our interest rate strategy and asset selection process.
Interest rate strategy
Our approach to interest rate management is driven by fundamental economic factors, although we also consider many other market influences, including the potential impact of non-fundamental drivers. We use a top-down approach to formulate our macroeconomic view in conjunction with a bottom-up approach to price instruments. Together this forms our best investment view, which guides our investment strategy.
Implementation of the strategy includes optimising the mix of interest-bearing assets (cash, variable rate, fixed rate and inflation linked bonds), duration size and yield curve position, that once combined, will drill down to stock selection.
Our asset selection process is designed to add yield to client funds by analysing and taking advantage of the opportunities provided in the lending markets. Using mainly a bottom up approach to analysis of borrowers, potential deals in both the listed and unlisted sectors are independently assessed. Key elements in the process are pricing for risk, and terms and covenants negotiated to protect clients’ investments.
When seeking assets in the development equity space, we use our existing knowledge of companies and markets to identify long-term opportunities in unlisted equity.
Ongoing analysis of the relevant debt and equity instruments, including both economic and environment, social and governance (ESG) factors, is conducted.
The above sources of outperformance are blended with the aim of reaching the best possible outcome depending on the mandate and the needs of our clients. We are constantly seeking better ways to generate sustainable returns for our clients.
A word on sustainable investing
We consider that investors play a key role in the capital allocation mechanism of the economy, and our fund investors are part and parcel of South Africa’s long-term development. We manage our business in a long-term, sustainable manner, we seek to assess each investee company in terms of their own sustainable practices - including consideration of the counterparty’s character, products and practices. We believe a responsible investor channels capital suitably to sustainable enterprises.