Last month Discovery Invest launched two new investment solutions in partnership with BlackRock and Goldman Sachs Asset Management.
A primary motivation behind the new offering was to simplify investment choice for South Africans looking offshore.
‘What we’ve seen in the past is that financial advisers and clients battle with the massive universe of investment options available around the world,’ said Kenny Rabson, CEO of Discovery Invest. ‘It’s difficult for brokers to navigate that world where you are sitting with probably 40 000 funds that one could choose from. And that’s ignoring passive options.’
While Discovery will continue to offer an international fund platform, its partnerships with BlackRock and Goldman Sachs collapses the global universe into six options.
BlackRock is managing three ‘best-of-breed’ risk-profiled, multi-asset global solutions, while Goldman Sachs Asset Management is running three differentiated share portfolios.
‘When we looked for overseas companies to help us with this, we were looking for companies with huge skill bases across the world,’ said Rabson. ‘BlackRock and Goldman Sachs are companies with huge worldwide representation.’
For the risk-profiled solutions, BlackRock will be essentially be acting as a discretionary fund manager.
‘We didn’t want a solution that is just BlackRock funds and ETFs,’ said Rabson. ‘They use a blend of BlackRock solutions and those from third party asset managers. So we felt satisfied with the breadth of the offering.
‘We felt also that BlackRock is ahead of the curve on ESG thinking,’ Rabson added. ‘We feel that the ESG mandate is a great mandate because we do believe that companies that get all that right in the future are the companies of the future.’
Goldman Sachs Asset Management’s role will be advising on three distinct share portfolios. These are a selection of the same portfolios that they offer to their own high-net-worth clients.
‘We chose them based on their stock portfolio management,’ said Rabson. ‘We looked at many advisers around the world and felt that Goldman Sachs has a fantastic track record in building share portfolios for clients. They advise over $1.6tn in 38 countries around the world, so their ability to run portfolios and do proper stock analysis and meet with management is facilitated by their global presence.
‘What is crucial is that clients and advisers get peace of mind when investing internationally,’ Rabson added. ‘We have had many situations of clients investing internationally and their returns are shocking. In many cases that is because local advisers are trying to put the solution together and it’s very difficult to do it remotely.’