Whether you’re growing crops or young talent, cultivation requires passion.
Becoming an aspirant farmer, attempting to grow maize, beans, and pumpkins on my family’s modest few hectares in Limpopo province, has become my new infatuation. Even though it was the livelihood of my forebears, I am, if you pardon the pun, a novice in the field.
As you can imagine, farming is a distant cry from running the largest asset management firm in Africa – the Public Investment Corporation. But the more I learn about tending crops, the more I realise that there are numerous parallels between these diverse entities.
As an arable farmer, my modest efforts are focused squarely on creating and stimulating growth to maximise yield. Something that my talented team and I obsessively pursued at PIC.
Keeping your eyes open to any circumstances and adapting immediately to fluctuating conditions is a prerequisite for both pursuits. And possessing the patience of Job – farming cannot be hurried any more than invested companies can be rushed into reaching their full economic potential.
Of course, in-depth knowledge is crucial. Every plant is a complex organism that requires deep understanding of its characteristics. Knowledge also needs to be acquired about potential hazards, diseases, and climatic factors that crops are susceptible to and how to restrict or minimise these risks. Ditto investments.
Fertile soil is crucial in farming since it determines what can be grown and whether yields will be high or low. Therefore, enriching the soil with fertilisers to maximise crop nutritional value also equates to leveraging shareholder value from invested companies.
And just as a farmer needs to be a ‘Jack of all trades,’ a good asset manager needs deep insights into copious industries.
However, one aspect of farming mirrors my experience at PIC more than any other (and elicits a profound sense of pride) is cultivating the skills of young, Black talent so they can thrive in the challenging but dynamic world of asset management.
Harvesting the energy of youth
Even though a survey commissioned in 2020 by The Association for Savings and Investment South Africa (ASISA) stated that 33% of South African asset management executive directors are Black, and that 15% of executive directors and 25.4% of executive managers are Black women, transformation still has a long way to go if the industry is ever to resemble the national demographics.
It may surprise you to learn that South Africa’s largest industry in terms of GDP is finance. Currently sitting at 24%, it is almost three times larger than the mining sector.
It is also fast-growing a great demand for skilled finance professionals. As I write this article, the number of vacancies being advertised on LinkedIn for asset management professionals in SA exceeds 772 positions. Online recruiter, Pnet, is currently advertising 1 198 investment analyst jobs.
Furthermore, industry sources are projecting that by 2031 employment for financial and investment professionals will grow by 9%, which is faster than the average projected growth for any other profession. In a nutshell, it means finding more than 32 000 new financial analysts in just nine years.
The most prudent investment the investment industry can make
For the industry to thrive, therefore, we urgently need to make way for the next generation of investment professionals. Fresh young minds; graduates brimming with energy, passion, innovative ideas, and ambition.
Millennials and the Gen Z need to keep Gen X and Baby Boomers (like myself) firmly on our toes! Seasoned professionals need to be challenged by young, spirited minds that are not hampered by conformist thinking. Experience needs to intertwine with the enthusiasm of youth. The world is changing; technology is advancing at phenomenal speed, and younger generations embrace it far quicker than their elders.
So, how can we introduce this fresh blood into the industry? I propose establishing an asset management academy that would provide university graduates with relevant degrees with a steppingstone into a career in asset management. A short but intense course that inspires as it educates.
While earning a reasonable stipend, academy students can learn about the fundamentals of the investment industry: risk and return, diversification, and compounding. In addition, they can gain insights into investment instruments and asset classes such as share markets and equity products, offshore, fixed-income markets, and pooled investments such as retirement funds, unit trusts and exchange-traded funds.
Once students complete the course, they should then be able to gain first-hand experience through internship programmes at any of South Africa’s 861 asset management firms. Not only will it be an invaluable experience for students, but it will also give employers a new recruitment channel.
Obviously, this idea presents more questions and answers. But let’s start the conversation on how we can support a viable industry-wide programme that will guarantee a sustainable influx of young Black professionals into asset management.
We need to do what good farmers have always done: plant the seeds so society can reap the benefits.
Dr Dan Matjila is the former CEO of the Public Investment Corporation (PIC), responsible for investing in the South African Government Employees Pension Fund (GEPF). During his term at the helm of PIC, Dr Matjila and his team grew the assets under management to over R2.2 trillion, making the PIC the largest asset manager in Africa.