Ferdi van Heerden joined Momentum Global Investment Management (MGIM) in 2010 after serving three years as CEO of a start-up insurance venture in Switzerland. He has held several senior executive positions in Momentum Metropolitan Holdings Limited (MMH) and the FirstRand Group, both listed companies on the JSE. During his career of circa 30 years with these Groups, his responsibilities included heading up Momentum’s individual life operation, the private pension fund administration business, as well as FirstRand’s consumer banking division.
Ferdi has 35+ years of experience in the life insurance and investment industries in South Africa, the UK and Europe.
Congratulations on your appointment as CEO of Momentum Investments. How do you feel about this opportunity?
I have been privileged to spend 30 years in various roles at the Momentum Metropolitan Group, with three years in Zurich and the last 13 years in London. It has given me a wealth of experience in and exposure to the investment industries both locally and internationally.
This new role will be an opportunity for me to plough back some of the experience I have built up courtesy of the Group, and to use the exposure I have had to guide our business during its next growth phase and take it forward. There’s much that we can do and should do in a fast-paced, changing world.
I look forward to leading the Momentum Investments team on this journey and helping build collective dreams into reality.
What is your objective in your new role?
We are a people’s business. We have an excellent team of people in the various Momentum Investments businesses in the Group, both in South Africa and the UK.
My immediate objective will be to solidify the foundation that was laid under Jeanette Marais’s leadership over the last five years and to build on this to set ourselves up for a sustainable global future.
One of my key objectives is to develop a truly global perspective in our business so that we deliver an international set of capabilities to our clients and advisor base.
Our clients increasingly invest offshore and when they trust us with investing their money, we must do so in a well-balanced manner in opportunities across the world to ensure the best risk-adjusted outcomes for them. To do so, we need to have global reach and capabilities. Given my tenure in London for the past decade, I can help focus our business to truly have a global mindset.
What is Momentum Investments’ unique selling proposition?
For us, it is always about people which is captured in our tagline: “With us, investing is personal”. It is as much about the customer journey as it is about the customer’s investment outcome.
Therefore, we make it our business to understand the individual needs of our advisor partners and clients so that we can help them achieve what they set out to do.
As a Group, our stated objective is to help individuals and businesses achieve their financial objectives. We try to make it easier for them to invest with confidence and secondly to stay invested. Our unique selling proposition in a nutshell is our people, our culture as well as our attitude to partnerships and business.
In my view, a challenge equals an oppurtunity if you are proactive
Please outline Momentum Investments’ investor capabilities locally and offshore.
Given the breadth of our capabilities, this could be a conversation on its own. But let me summarise it in three buckets. First, in terms of our investment capabilities, we have a wide range of local and offshore fund solutions, with various risk profiles. We consider ourselves a specialist multi-asset investment manager, with solutions in multiple jurisdictions. In South Africa, we have locally authorised unit trusts, in the global space we have UK-domiciled unit trusts, Luxembourg-domiciled funds and Guernsey solutions; so quite a wide range that speaks to our global clients’ requirements.
While multi-asset is a key focus area for us, we also have a range of single-asset class solutions, both locally and internationally, and specialised skills. In South Africa, these include systematic strategies, fixed income, as well as alternative solutions, including thematic investments. In the UK, we’ve got great global fixed income and direct real assets investment capabilities. For other asset classes, we choose to execute via our select global and local range of asset management partners, which includes Robeco.
In the wealth management (retail) space, we are and have been one of the leading investment platform providers, both with our local Momentum Wealth platform, as well as our offshore Momentum Wealth International platform in Guernsey. We were one of the first linked investment service providers (LISP) in South Africa offering local and global solutions to our South African clients, as well as to expat investors in various jurisdictions around the world. We have a wide range of retirement solutions in our retail business which are well set up to look after the retirement needs of clients, including our life, living and hybrid annuity solutions.
To service our advisor partners well, we have a strong discretionary fund manager capability under the Equilibrium brand that speaks to an advisor’s need for managed portfolios.
Lastly, our Momentum Securities business initiates access to bespoke wealth management needs of high-net-worth clients as well as institutional stock-broking needs.
As an investment company operating in multiple spaces, how do you deal with the different sustainability taxonomies across markets?
As an investment business, we have a key role to play in terms of ensuring that we help create a sustainable future world for our clients and the next generations. We follow an integrated investment approach towards environmental, social and governance (ESG) factors and responsible investing to help enable this. Given the multiple jurisdictions in which we operate, this also means that we are subject to different regulatory taxonomies regarding ESG.
Global investment managers would prefer one common taxonomy that applies to all sustainable investments and jurisdictions, but this isn’t likely to happen soon given different local government and regulatory priorities. We are already subject to the Sustainable Finance Disclosure Regulation (SFDR) in Luxembourg given our global fund range.
Recently, the Financial Conduct Authority (FCA) in the UK announced its sustainability disclosure requirements (SDR), which is different to the SFDR. This introduces complexity and additional costs in terms of the disclosure requirements when we distribute funds in multiple markets.
Quite a few fintech AI-type solutions are becoming available that will help with the reporting requirements for the different taxonomies and will save a lot of effort and costs but will also assist in ensuring fair reporting and address concerns with regards to greenwashing.
We’ve always been an advice led investment manager
Please discuss the role of technology, and specifically AI, for the future of the investment industry.
I firmly believe an AI-driven technology revolution is underway that will reset the rules of financial services and the future of investment managers. The investment industry is not known for leading technology innovation, and a mindset shift is now required in this regard. Ignoring this will be at our peril.
The use of new technologies will be imperative to manage margins in our business as they bring efficiencies to regulatory and commercial pressures on fees. Our operating models will have to adapt to ensure they are resilient and future fit.
Also, technology is changing how clients wish to deal with investment management firms and how they access investments in the future. We must make sure that we keep pace with that as an industry. However, any technology solution is as good as the data that the technology is using. Hence, a big focus for Momentum Investments is data integrity that would enable and support various forms of AI-enabled solutions.
Over the years, our Group has invested in several fintechs and insure-techs through our Exponential venture funds in the UK and South Africa, which gives us access to new thinking and an opportunity to see “the Art of Possibility”.
Our FNZ partnership in the wealth management space will bring a lot of digital capabilities to our LISP platforms in South Africa and Guernsey.
About 18 months ago, we embarked on a project to explore the potential use of AI in our investment processes in our UK business.
The intent will be to use this to provide market and asset class analysis at scale, and to use this as an enabler to assist our portfolio managers with their tactical investment decisions. While still early days, we can certainly see the benefit of AI and how this can inform decision-making of our investment team.
We are a people’s business first and foremost, and we see technology (and therefore AI) as an enabler for how we do business and analyse data. Our intent is not to replace our people with technology. We use technology to provide scale and capacity and to enhance our decision-making across the business. If anything, we need to do more and experiment more and be brave in that space.
For us. it is as much about the customer journey as it is about the customer outcome
What do you deem to be the most critical component of financial success for investors?
Two key factors that I would highlight are the need for advice, and time. We’ve always been an advice-led investment manager. We believe in the need for advice. Investments have a profound impact on your future and in retirement. The outcome that you achieve in years to come depends very much on the advice you receive now.
Many people forget the importance of time in investment outcomes. The earlier you start the better. Often advice is not available to young people at the early stages of their professional lives, and it is critical that this changes.
Also, staying invested over time is paramount. Too often, decisions to disinvest and reinvest are made at the wrong times. Consistency of staying the course and investing over long periods is important. Partnering with a financial advisor will help enable investors to choose the suitable options for them and take any changing circumstances into account along the journey.
What are the opportunities and challenges for Momentum Investments as a group in 2024?
Whether it’s 2024 or beyond, there are many challenges. In my view, a challenge equals an opportunity if you are proactive and you have a positive attitude. The world has many challenges geographically, socially, environmentally, economically and technologically. It’s how we deal and interact with these challenges that will determine our future success.
Globally, a major challenge that we are all facing in investment management is the lack of enough investing by consumers. People disinvest and then remain disinvested, or they use the money to maintain a lifestyle in the short term. It has to do with affordability (cost of living pressures), but it is often also a mindset. It has become too easy to spend money as opposed to investing it.
As an industry, we need to educate and engage consumers and make sure that investing is exciting for them, that it is easy to access investment products and that we provide appropriate information to enable them to stay invested. Consumers need to understand what they are investing in, and the future value that they are creating for themselves in doing so.
We’re passionate about the effect that investments can have on people’s lives. Investing and saving more must become a national-focused drive in South Africa because it impacts materially on people’s long-term futures, specifically in retirement and their ability to achieve their life goals.
With digitalisation, we can hopefully enable that a bit more. It needs an ongoing collective effort from the industry to make sure that we fly the flag of the need for people to invest and save more.
How does Momentum Investments drive wealth management value chain alignment?
The whole future in financial services is about how we participate and engage in various ecosystems and value chains.
We value advisors in our industry, acknowledge their importance, and take time to understand their needs. In the front office where the
client connection is key, our products and investment platform can easily integrate and support the requirements of our advisor and institutional partners.
In our middle and back office, we use a variety of global and local partnerships. We align ourselves and integrate with global fund administrators and custodians in all the jurisdictions where our funds are domiciled to ensure seamless execution of investments on behalf of our clients.
Hence, digitalisation is a key focus area for us to ensure that our operating models are fit for purpose and can easily become part of various vertically integrated networks. FNZ as a global technology partner on our funds’ platforms is part of this.
Our DNA has always been focused on advisors. We know how to work closely with advisors so that when they need us to align our
investment propositions with their advice philosophy, we can do so. For us, it is about the ecosystems that we participate in.