South Africa based Momentum Investments says investments in shaky markets such as Zimbabwe — where a fragile unity government is battling to revive an economy devastated by mismanagement — are a gamble the firm is willing to take.
Momentum Investments — an investment house born out of the merger between Metropolitan and Momentum’s investment-related businesses — is ultimately owned by MMI Holdings, SA’s third-largest insurer by embedded value.
It has assets under management of about R320bn, ranking it among the top five in SA.
It has units providing alternative, collective investments and global investments, and also has property assets.
Investments chief executive officer Morris Mthombeni says Momentum Investments has flown staff to growth markets such as Nigeria, Rwanda, the Democratic Republic of Congo and even Zimbabwe.
“You look at your portfolio and decide how much money you would hypothetically be willing to lose, if indeed you are going to lose it, and invest,” he said.
“For us, Zimbabwe is a country with great potential despite the risks, which we understand better than, say, a fund or asset manager from Europe.”
Mthombeni said the firm has established an Africa Fund with R60m worth of investments, mostly in equities, he says.
“It is doing well and we have a team of four people who are burning Voyager miles trying to find investments.”
He said Africa is the flavour of the moment for global investors, who are reducing their exposure to stagnant, developed markets.
While Africa was considered a basket case until a decade ago, now democratic and economic reforms, and a growing middle class are creating fertile ground for sustained growth in the region over the next two decades or more. Mthombeni shrugs off competition from local and global asset managers who are also searching for markets in Africa. He says the firm is not in a race to become the largest fund and asset manager in sub-Saharan Africa.