We are pleased to announce that RECM and Counterpoint Asset Management have reached an in-principle agreement to merge their operations. Importantly, the two firms have complementary skills and investment philosophies and share a similar culture.
The asset management industry in South Africa is highly fragmented. Intense competition and an onerous regulatory environment has resulted in increasing margin pressure. We believe that the even greater depth and reach resulting from our integrated teams, when added to the current compelling performance history in many of the fund offerings, will be of great benefit to all clients. We share the same vision, and consolidation makes sense. Combining assets and skills not only enhances our ability to deliver on our investment mandates, but importantly, scale also allows for an incremental reduction in costs to our clients, over time. We thus anticipate and will be seeking out more discussions with other, like-minded investment firms.
The process is expected to take a several months to complete, however the following key principles have been agreed upon:
- The consolidated business will trade under the Counterpoint Asset Management brand.
- Where fund overlap exists, funds will be amalgamated.
- The business will be led by Linda Eedes as the Managing Director. Sam Houlie will lead the investment team as the Investment Director. Chris Stainforth will continue as CEO and will step down on completion of the merger.
- Piet Viljoen will join the Counterpoint investment team as a portfolio manager and will continue to manage those funds to which his style and experience is most suited.
- The combined entity will manage assets in excess of R6.5bn, with a well-resourced investment team.
- The transaction involves a restructuring of Counterpoint Asset Management which will see RECM (Pty) Ltd and Merchant West Holdings (Pty) Ltd acquire a joint controlling shareholding in the consolidated business.
- Merchant West Holdings (Pty) Ltd is one of SA’s biggest independent financial services providers with a history of over 20 years in the financial services sector.
- The transaction will be subject to regulatory approval.