The Absa Multi-management team has set the bar extremely high! This particular bar is R67 billion high. The team landed Jonel Matthee as their leader three years ago. With assets under management and advisory of about R6 billion at the time, her work was cut out for her. Absa Multi-management is wholly owned by Absa and has a level two contributor BEE rating.

Jonel managed to bring together a diversified group of individuals to make up manager research; operations and portfolio support; portfolio construction and strategy; portfolio management; and more recently, the institutional business.

There is a wealth and depth of experience within the team. The Multi-management team boasts a successful 10-year history of managing assets. In that period, the team has won Morningstar and Raging bull awards for the Multi-managed Bond fund. The offering spans from low to high risk, with funds along the full spectrum. Their offering includes income, equity and global funds, with more offshore solutions in the pipeline.

For investors, a multi-manager removes the pressure of having to look for single managers, understanding how they operate, what they do and also monitoring performance. Jonel says “Investing in a multi-managed solution gives you a more diversified option, as we combine different managers with different views and this gives a more stable risk-adjusted return.”

Multi-managers blend different investment views. Combining a defensive manager with a manager focusing on growth strategies is an example of a combination which will benefit the client in different market environments. Manager style performances are cyclical and while there can be long periods of outperformance for one style, reversals can happen faster than most market participants can react. This is where the benefits of a multi-manager really kick in. They create a cushion for investors, particularly where a particular manager is underperforming significantly. The Absa Multi Management team have the expertise and focus, allowing them to do in-depth research into new managers or into finding untapped opportunities.

What is the secret sauce you may ask? It lies in the robust and well-tested philosophy and process.

Once step 1 and 2 are complete, with the investment objective in place and the mandate and benchmark finalized, step 3, which is portfolio construction can occur. Portfolios are evaluated against a basket of top-performing peers; passive building blocks and also CPI. The portfolio construction process is rigorous, with construction simulation and stress testing embedded in the process. Step 4 is imperative as this is where performance is measured and tracked. Rebalancing occurs where necessary to allow for optimal performance. This review process is imperative. Due diligence processes are carried out on all managers locally and offshore on a bi-annual basis. The Due diligence process involves both qualitative and quantitative analysis. The final step involves reporting.

Jonel is extremely optimistic about the future and it’ll be exciting to continue watching her and her team as they continue to soar.

Tsitsi Hatendi-Matika is Head: Retail Investment Specialist at Absa’s Wealth and Investment Management unit.