S.Africa’s Discovery partners with BlackRock to create a new asset management entity

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JOHANNESBURG, August 23 (Reuters)The South African insurer Discovery Ltd DSYJ.J said on Tuesday it was joining forces with global asset manager BlackRock Inc BLK.N to launch a fund management entity, to tap into the growing local multi-billion rand discretionary fund management industry.

A discretionary fund manager (DFM) is a company whose clients are primarily financial advisers but also has the freedom to buy and sell investments at its own discretion.

In this investment model, the DFM takes care of the arduous laws and regulations that come with buying and selling investments, especially offshore, freeing up advisers to look after their clients.

Discovery’s DFM entity, Cogence, will combine BlackRock’s asset allocation strategies and use client data from Discovery’s proprietary behavior change platform Vitality to create a series of personalized products for clients, the insurer said in a statement.

“What we’re bringing here is a totally different take on global fund management, where instead of just a single asset manager view, you get global research from BlackRock,” said Adrian Gore, CEO of Discovery Group. Reuters.

There are several DFMs in South Africa, but most lack substantial expertise in the offshore market, which is a gap Cogence would seek to fill, Gore said.

He said that Cogence, with its product portfolio, will also be available on other fund managers‘ platforms.

The South African asset management industry has shifted towards equity-focused products since the pandemic, as stock market returns soared after the March 2020 crash. clients for the stock market and hurt cash and bonds, forcing asset managers to launch more. equity products.

Gore said Cogence would have products based on customer risk profile data and could be a combination of cash, stocks and bonds.

(Reporting by Promit Mukherjee in Johannesburg under the direction of Matthew Lewis)

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