Manager Research

Allan Gray has notified us that there will be a number of senior level team changes taking place over the next few months. These are significant changes and we will be expediting our due diligence review to address the changes and evaluate the ratings we have across the affected funds.

The changes are as follows:

• Andrew Lapping (current Chief Investment Officer and portfolio manager across Equity, Balanced, Stable and Bond funds as well as the Africa funds) will be departing Allan Gray and relocating to Europe. Andrew has approximately twenty years’ experience within Allan Gray and has fulfilled the CIO role since 2016 when Ian Liddle moved to Chairman. At this stage it appears he will be making a career change away from investments. 
• Duncan Artus (current portfolio manager across Equity and Balanced funds) will assume the role of CIO. Duncan also has around twenty years’ experience within Allan Gray and is a long-standing Equity and Balanced portfolio manager. 
• Mark Dunley-Owen will be relocating to Bermuda to join Orbis where he will become part of the Global Balanced team. He will continue to manage the Africa ex-SA Bond fund alongside Londa Nxumalo. Mark is currently a co-manager on the Bond fund as well as the Stable fund, as well as a key contributor to the fixed interest portion of the multi-asset funds.
• Leonard Kruger (current co-portfolio manager of the Stable fund) will be leaving Allan Gray and taking up a role at Prudential. Leonard started with Allan Gray in 2007.

Allan Gray has appointed three new portfolio managers to supplement the fund management team. These are:

• Rory Kutisker-Jacobson (BBusSc CFA) started with Allan Gray in 2008 and has been managing a portion of the Frontier Equity Fund and more recently the Africa ex-SA Equity Fund, and is a senior member of the SA equity research team. 
• Tim Acker (MAcc CA(SA)) started with Allan Gray in 2013 and has responsibilities in SA equity and multi-asset research. 
• Sean Munsie (BAcc (Hons) CA(SA)) started in 2013 and has responsibilities in SA equity and multi-asset research.

Ruan Stander and Jacques Plaut will remain as portfolio managers across Equity and Balanced alongside Duncan. Ruan will also continue to manage the Optimal fund. Londa Nxumalo who currently co-manages the Bond fund with Mark Dunley-Owen will be the sole portfolio manager of the Bond fund, as well taking on increased responsibility for the fixed income in the multi-asset funds. Thalia Petousis will take on additional fixed income responsibilities to replace Mark, and she will also be the sole manager of the Money Market fund.

While the appointment of Duncan as CIO is their most experienced CIO appointment to date, we do need to test a range of implications for the management of the team as well as the role he will play across the broader business.

The promotion of Tim, Rory and Sean to portfolio manager is based on the assessment of managing what Allan Gray call ‘paper portfolio’s’ or ARL’s (Analyst Recommendation List) which is the proving ground all analysts follow to demonstrate portfolio management aptitude over and above research insight. This is taken in addition to their contribution to the equity research process.

Over the coming weeks we will conduct our review of these changes and the impact on the Allan Gray funds. While Allan Gray has long had a well-functioning succession and portfolio manager training process, this is somewhat of a departure which also comes at a relative weak time in their local and offshore performance cycle. 

At this stage we would highlight that we do not believe the responsibility changes are linked to the current performance cycle, but rather linked to the larger issue of emigration. We have raised this point previously, (see note here) on the potential for this trend to undermine the stability of investment managers in SA.

We will communicate our updated views to clients once we have completed this review process.