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The SOE Debate

Company statement

Futuregrowth came to an investment decision that, as fiduciaries for investors’ savings, we could not provide additional finance to some of the largest SOEs without having deeper sight of, and comfort around, their governance, decision-making and independence.

Futuregrowth further decided, with internal unanimity and no external discussions, that we should make our views public. While such public airing of investment views is an everyday thing (in print, on-line and on-air) this announcement garnered completely unanticipated attention, as well as a range of unfortunate and possibly damaging misinterpretations. The unintended consequences on others’ has been such that it demands some reflection on our part.

Notwithstanding a range of good reasons for a speedy dissemination of our view, in light of the fallout we must frankly concede that a more measured approach of direct consultation with each SOE, before contemplating public comment, would have been a fairer process.  I would like to personally apologise to each of the SOEs concerned, and their respective government Ministers, for my failure to ensure a fair, one-on-one engagement.

The decisions were made by Futuregrowth alone, as an independent, fiduciary asset manager. It is grievous that Old Mutual has been dragged into a debate which they neither knew about, endorsed, nor could practically control. In my view, Old Mutual has shown themselves to be a pro-active and developmentally focused organisation, who has sought to bring about positive change in South Africa. 

We are pleased that most of the relevant SOEs have engaged and shown a willingness to have deeper discussions about their governance, decision-making and connectivity to spheres of government. Most of the SOEs, at their own discretion, are taking the lead by engaging with investors quickly and proactively.  Futuregrowth is actively continuing our engagement and governance assessment process with the SOEs.

For others who feel aggrieved by our public stance, please accept that our intentions were sound and fiduciary, and the decision was ours alone.

We remain committed to partnership with the SOEs in funding South Africa’s development.

Andrew Canter, CIO
Futuregrowth Asset Management

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Andrew Canter / SOEs