PineBridge Investments says that as investors look to diversify their portfolio and gain access to global opportunities, it is crucial for them to assess both the manager and the recommended products carefully, in order to ensure that their investment strategies are implemented and their goals are met.
Meeting offshore investment goals are directly dependent on the manager and the personalised strategy formulated on behalf of the investor. The process of selecting the right manager to meet investment goals can be difficult, as the global investment space is filled with a vast array of products, asset classes and managers.
PineBridge shares the following factors to consider when selecting the right offshore investment manager:
"First and foremost the manager should have the appropriate FAIS license and FSB approval for the appropriate categories to operate in South Africa. CISCA Section 65 approval for specific products is also required to solicit investments in South Africa. In addition, the FAIS Act requires that a manager appoints a key individual and Compliance Officer."
PineBridge suggests that it is better to select a manager who has a global footprint with local infrastructure and representatives on the ground in the various markets and regions who understand the nuances of the local market, knows the local government rules and regulations as well as the restrictions on buying offshore.
The global asset manager adds that investors should do their homework and check more than just the past performance: "In addition to looking at quantitative factors, it is always a good idea to perform qualitative analysis on the manager and the investment house in order to understand their philosophy, investment style and process."
Windall Bekker, Senior Vice President of PineBridge Investments in South Africa believes that investors should consider factors such as risk, return and the risk adjusted rate of return. "Each factor is related to the investment objective. For example, an aggressive strategy will place a higher emphasis on return factors and a lower emphasis on risk factors."
