Manager Research

SIM Unconstrained Capital Partners was a stand-alone boutique within Sanlam Investments. The boutique was started in April 2004 by two senior SIM portfolio managers, Claude van Cuyck and Ricco Friedrich.  Staff were collectively material minority shareholders in the business, with Sanlam Investments owning a majority stake. The business effectively manages one product, the SIM Value Fund, for both individuals and institutions, and has approximately R11bn of assets under management.

SIM Global was 100% owned by Sanlam (i.e. staff did not own any shares in the internal boutique) even though the boutique operated relatively autonomously.  The boutique is headed up by Kokkie Kooyman and Douw Steenekamp, and manages assets of around R9bn. 

The two boutiques will merge to form a new business, Denker Capital.  The business will effectively be 51% owned by staff with Sanlam retaining a 49% stake.  The combined business will operate independently of Sanlam to a large extent (similar to how SIM Unconstrained operate now) but still have links through the operations and distribution of Sanlam.

The team have indicated that there will be no change in the team structure – there will be no CIO or MD to run the collective business.  Each investment team will continue to operate as they did before and the full team from both boutiques remains intact.  Our initial assessment is that it is “business as usual” with the positives that the staff are now majority owners and that the staff of both boutiques have a direct incentive linked to the business' success through the shareholding (not the case for SIM Global before).

We have rated the SIM Value Fund (Tier 2) managed by SIM Unconstrained Capital Partners and the SIM Global Best Ideas Fund (Tier 3) managed by SIM Global.  We will need to spend time with the managers to ensure we understand the changes in detail, but at this point we still believe it is appropriate to retain the existing ratings.