Identify, partner and grow world-class asset managers

"Our model is unique as no one else is looking to back South African asset managers the way we are. We are part of a long-running and reputable group known for backing entrepreneurs in financial services and we are unconflicted with any other group businesses. We believe we have a purist model where we can use our deep capital pools with RMI's large balance sheet, our strong brand name and our expertise as a strategic investor to really help asset management businesses grow.

Key to our model is the ability for our affiliates to retain their independence, particularly when it comes to their investment capabilities. Each affiliate’s investment team retains majority ownership, a vital ingredient of the model. We will help our affiliates run and grow their businesses so that they can spend more time investing client money which is always their priority but not always where they get to spend their time."
RMI IM CEO Chris Meyer

 

OUR MODEL

RMI Investment Managers (RMI IM) recently launched an affiliate investment manager model – the first of its kind in South Africa. RMI IM’s new affiliate model enables the company to access a differentiated part of the investment management industry by investing in and partnering with independent investment managers, as well as specialist investment teams. RMI IM has taken 25% to 30% equity stakes in boutique investment managers and will continue to search for opportunities that will complement RMI’s existing suite of managers, as the company build its share of the South African investment management market. This approach assists boutiques to transform from third-tier investment managers, each responsible for between R3 billion and R5 billion in assets under management, to first-tier investment managers.

 

Bringing the model to life

STAND-ALONE AFFILIATES
Buy into affiliates that want RMI as a strategic partner but have established distribution already
25% - 30%
equity stakes
by affiliates

AFFILIATES WITH DISTRIBUTION PARTNER MODEL
Buy into affiliates and team 'lift outs' that see value from having RMI as a shareholder/partner and MMI as a non-executive distribution partner
25% - 30%
equity stakes
by affiliates
50% - 90%
equity stakes
by Fixed Income Team

EE MODEL
A majority black-owned vehicle, investing in black-owned investment managers and black investment talent
20% - 30%
equity stakes
by asset managers

50% - 90%
equity stakes
by black investment talent

 

WHY WE DO THIS

Nearly 40% of investment management firms that started between 1990 and 2013 vanished by means of acquisition, merger or closure with the average lifetime close to only five years. Reasons for this failure include lack of steadfast shareholder support, poor business models, lack of differentiation and poor investment returns.

To address this, RMI IM partners with independent investment managers in South Africa by becoming a shareholder in their businesses to help take their business to the next level, by adding support through the RMI association, business acumen and strategic insight through the company’s executive team and board, investment-raising capabilities through its distribution team as well as operational robustness and economies of scale through its operational team.

RMI IM also provides additional distribution capabilities to complement the company’s affiliates’ own distribution teams. RMI IM has started its distribution model by hiring an independent financial adviser (IFA)-focused distribution team and partnering with MMI, a distribution business that has a long history with the advisor industry. RMI IM will use the insights and relationships from these sources to understand how to best service the changing adviser market.

 

RMI IM WILL HELP ADDRESS THE CHALLENGES BOUTIQUES AND INVESTMENT TEAMS FACE

STRATEGIC SUPPORT
ALIGNMENT OF INTEREST
  • Credible shareholder
  • Enhance capacity and experience
  • Partner that understands investment management
  • Track record of backing entrepreneurs
  • Focused on maximising future value
  • Strategic involvement in succession planning
FINANCIAL SUPPORT
DISTRIBUTION AND MARKETING
  • Start-up capital
  • Seed capital
  • Scale capital
  • Credible brand in IFA and retail channels
  • Open architecture distribution
  • Distribution relationship with RMI portfolio companies (e.g. MMI) and network
OPERATIONAL SUPPORT
  • Advises on operational excellence
  • Compliance and regulatory
  • Portfolio administration, technology etc. operationalbox