1. Stanlib Update
Alan Botha
Senate Conference, November 2013

2. STANLIB Print Adverts
2

3. We Are a
Leading
Investment
Business
Scale
Enduring Track Record
30 June 2013
Largest
Oldest
R504 bn
Unit Trust Company
in Africa
existing Unit Trust in
South Africa:
STANLIB Equity Fund
Assets under
management and
administration
Level 2 BBBEE Status*
Our Clients
Awards*
71%
400 000+ 72
92
of our investment team
are black
Retail and Institutional
clients
*South Africa only
Raging Bull
Awards
Morningstar
Awards
* Since 2002
Operating Model
Our People
Heritage
Advantages
Diverse
and commitment of a
boutique, strength and
efficacy of a large
investment house
Part
and complementary
skills and capabilities
of a bigger group:
Standard Bank and the
Liberty Group

4. Geographical Reach
Creating 7
Financial Freedom
Experienced Team
80+
African countries
Investment
professionals with over
1000 years of collective
investment experience
Investment Capabilities
Franchise Model
Diverse
Designed
investment offering
designed to deliver our
investment promise to
clients
to deal with the
complexities of the
investment world with
agility
Our Values
➜
➜
➜
➜
Passion for our clients
Investment Excellence
Innovation and Curiosity
Teamwork and Fair Play

5. There is no ‘one size fits all’ investment
solution for clients. Diverse clients need unique
investment outcomes.

6. Multi-Specialist Franchise Model
The Leaders of the Teams who Manage your Clients’ Money
Henk Viljoen
Herman van Velze
Robin Eagar
Keillen Ndlovu
Fixed Interest Franchise
Balanced and Core Equity Franchise
Balanced and Value Franchise
Listed Property Franchise
Amelia Beattie
Eben Maré
Andrew Vintcent
Patrick Mamathuba
Direct Property Franchise
Absolute Return Franchise
Unconstrained Equity Franchise
Beta Quants Franchise
John Mackie
Henry Munzara
Joao Frasco
Greg Babaya
Pan-Africa Franchise
Research Franchise
STANLIB Multi-Manager Franchise
Infrastructure Franchise
Marius Oberholzer
6

7. STANLIB Core Solutions
INVESTMENT SOLUTION
MODERATE
CONSERVATIVE
AGGRESSIVE
STANLIB
Equity Fund
Growth
RETURN
STANLIB
Balanced Fund
(Reg 28)
STANLIB
Dynamic Return
Fund (Reg 28)
Income and
Growth
Income
STANLIB
Balanced Cautious
Fund (Reg 28)
STANLIB
Flexible Income
Fund (Reg 28)
1-3 years
TIME HORIZON
3 years
5 years +
3 years +
5 years +
MAXIMUM EXPOSURE TO GROWTH ASSETS
DOMESTIC EQUITY
OFFSHORE
10%
40% 25% 15%
75%
25%
75%
25% 25%
100%
20%
PROPERTY
7

8. Retail Distribution:
Marketing Asset Management
Johannesburg
Great North
Alan Botha
Hannes Weideman
Pat Magadla
KwaZulu-Natal
Simon Bent
Wholesale and External
Platform
Allan Geddie – Cape Town
Lenise Albertyn
Troy Mazibuko – Johannesburg
Western Cape
Carolyn Vlaming – Relationship Manager
JHB
Eastern Cape
Duane Littler
Lara Parker
8

9. Africa: An Investor
Perspective
David Makoni
Senate Conference, November 2013

10. Presentation Outline
➜
Introduction to STANLIB
➜
Presentation Disclaimer
➜
Africa in the Global Context
➜
Evolving Perceptions of Africa
➜
Reasons for Shifting Perceptions
➜
Thoughts on Successful Investing
➜
The Lingering Challenges

11. 01
Introduction to STANLIB

12. A Leading Africa-Focused Investment Business
Scale
30 June 2013
LARGEST
R504bn
MANAGEMENT
Company in Africa
(Manco)
ASSETS UNDER MANAGEMENT
AND ADMINISTRATION
Experienced Team
Experienced Team
80
Raging Bull Awards
72
OLDEST EXISTING
Investment professionals
with over 1000 years of
collective investment
experience
UNIT TRUST IN
SOUTH AFRICA
STANLIB EQUITY FUND
Local Presence in African Countries
7
In-country businesses
Morningstar Awards
92
Don’t choose a company focused on performance, choose a focused company that performs.
12

13. STANLIB’s Geographic Presence and Ambitions
Current physical presence
Markets serviced from other jurisdictions
Potential presence
South Sudan
E
First Asset Manager to manage money in South Sudan
Uganda
W
STANLIB was the first asset manager to set up shop in
2002
Ghana
Kenya
Nigeria
Running the largest Unit Trust in Kenya
Namibia
Tanzania
Launched the first Property Unit Trust in Namibia
in 2007
Swaziland
Botswana
AUM of E4.0 billion and largest fund manager with local
presence
Currently has the biggest unit trust platform in the
country and running the biggest Money Market
Fund in Botswana
South Africa
Largest Management Company in Africa
Lesotho
S
STANLIB launched the first unit trust in Lesotho as part of
the Lesotho Government’s privatisation initiative
E=East Africa; S=Southern Africa; W=West Africa
13

14. DISCLAIMER
The views expressed in this presentation are solely mine
and do not in any way represent the official views of
STANLIB.
14

15. Africa in the Global
Context

16. Africa In The Global Context….
Africa’s Geographic Size
➜
54 distinct countries
➜
Collective GDP of USD1.8 trillion in 2011
➜
➜
➜
Roughly equal to GDP of Brazil or Russia
USD2.6 trillion in collective GDP by 2020
USD860 billion combined consumer spending power
in 2008
➜
USD1.4 trillion in consumer spending by 2020
➜
➜
10% of the world’s oil reserves and 90% of its
chromium and platinum group metals
➜
316 million mobile phone subscribers signed up in
Africa between 2000 and 2010;
➜
Map source: World Watch
Accounts for 60% of world’s total uncultivated arable
land;
Average government debt-GDP (%) for sub-Saharan
Africa reduced to 31% in 2010
Source: McKinsey & Co
16

17. Africa Suffers From Excessively Negative Global
Perception…
➜
Under-reporting of Africa’s success stories by the global media (The ‘Bad
News is Good News’ syndrome)
➜ Versus sustained promotion of other developing regions as only viable ‘can-do-no-wrong ‘
economic propositions (BRICS, South-East Asia, etc.)
➜
Endless projection of Africa as a ‘basket case’ by global aid agencies in
order to justify the existence of the global ‘Aid Complex’
➜
Historical prejudices towards black Africans by other nationalities
➜
Lingering (and justifiable) memories of past policy mistakes and leadership
short-comings on the continent
➜ With some exceptions, the overall trend is one of positive change and development
17

18. 02
Evolving Perceptions of
Africa

19. Previous Perceptions of ‘Hopelessness’…
19

20. …Have Shifted to Optimism and Opportunity…
Source: Various Publications
20

21. Hence Major Global Firms Showing Growing
Confidence…
June 2011
May 2012
Wal-Mart Completes
Massmart Purchase
Korean Companies
Invest in Africa
“Doug McMillon, the
President and CEO of WalMart International Inc.,
said, ‘With the closing of
our investment in
Massmart, we are very
excited about our entry
into South Africa and the
broader African
continent…’”
(Wal-Mart Stores Inc.
website)
South Korean mining,
electronics, power
generation and
telecommunications
companies are looking to
invest more in African
countries, as these
markets expand at an
accelerated pace. In May
2012, Samsung said it
aimed to realize US$5
billion dollars in revenue
by 2015 from subSaharan Africa. (Reuters)
August 2012
Nestle Looks to Africa to
Boost Growth
Global food producer
Nestlé is hoping
emerging markets will
contribute about 50% of
sales by 2020, with
Africa's contribution
growing to more than
10%, CEO Paul Bulcke
said yesterday.
Consumer goods
companies are
increasingly seeking to
tap into the growing
African market of 1billion
people. (Financial Times)
August 2012
“American Firms Waking
Up to African
Opportunities”
“American companies
are starting to wake up
to huge investment
opportunities in Africa”,
chairman of US ExportImport Bank, Fred
Hochberg, said in
Johannesburg yesterday.
The bank’s loans to
Africa have more than
doubled from $14 billion
in 2009 to $33 billion in
2011. (Source: Yahoo!
News)
21

22. …and Africans Showing More Confidence in
Themselves!
25 August 2010
Dangote Becomes Largest
African Investor in S.
Africa
Dangote Industries
Limited has formally
increased its stake in
Sephaku Cement, which is
based in South Africa,
from 19.76 % to 64%. The
transaction, which
comprises a R779 million
investment into Sephaku,
is the largest ever foreign
direct investment by an
African company into
South Africa.
Source: Business Day
12 December 2011
Nakumatt Pushes Further
into Africa
Kenya-based supermarket
chain Nakumatt on
Saturday took another
step towards its goal of
becoming a Pan-African
retailer when it opened its
first outlet in Tanzania.
The company now has a
presence in four African
countries, namely Kenya,
Uganda, Rwanda and
Tanzania. An outlet in
Burundi is also on the
cards.
Source: Daily Nation (Kenya)
31 July 2012
Shoprite Takes On the
DRC!
Africa’s largest
supermarket group,
Shoprite, entered the
Democratic Republic of
the Congo (DRC) with the
opening of a
supermarket in the
capital Kinshasa. The
South African company
has been planning to
enter the DRC since
2007, according to a
report by Cedric Bra,
retailing analyst at
Euromonitor.
Source: Bloomberg
25 September 2012
Tiger Brands Buys 63%
stake in Nigerian Flour
Mills
Consumer goods firm
Tiger Brands said on
Tuesday Nigerian
authorities had cleared
its R1.5bn purchase of a
majority stake in
Nigeria’s Dangote Flour
Mills. The deal is Tiger
Brands' third and the
biggest yet in Nigeria.
Source: Finweek
22

23. 03
Why the Changing
Perceptions?

24. Why the Growing Interest in Africa?
➜
Positive macro-economic growth prospects
➜
Improving political dynamics
➜ Fewer bullets, more ballots!
➜
Rapidly reforming business environments
➜
Positive demographic shifts
➜ Large youthful population, growing urbanisation, Diaspora influence
➜
Growing economic engagement with BRICSA
➜ Has created new business allies for the continent with a different risk appetite
➜ Compelling Western investors to play ‘catch-up’ to counter growing BRICSA influence
➜
Shifting mainstream perceptions of Africa globally
➜ Growing appreciation of Africa as a viable business proposition
24

25. Most of the World’s Ten Fastest-Growing Economies
are African…
Annual average GDP growth, %
2001 - 2010†
2001 - 2015‡
Angola
11.1
China
9.5
China
10.5
India
8.2
Myanmar
10.3
Ethiopia
8.1
Nigeria
8.9
Mozambique
7.7
Ethiopia
8.4
Tanzania
7.2
Kazakhstan
8.2
Vietnam
7.2
Chad
7.9
Congo Brazzaville
7.0
Mozambique
7.9
Ghana
7.0
Cambodia
7.7
Zambia
6.9
Rwanda
7.6
Nigeria
6.8
† 2010 estimate
‡ Forecast
Sources: Economist Intelligence Unit, 2012; International Monetary Fund (IMF)
25

26. Increased Urbanisation and a Growing Consumer Class
Sub-Saharan Africa: Urbanisation Rate (%): 2000-2050
Segment Income Market Value (2000-15, USD Billion)
Source: Accenture, 2011
26

27. African Countries Becoming More BusinessFriendly than Before
Number of key Doing Business reforms making it easier to start a business (2006-2013)
Source: World Bank Doing Business Report, 2013
27

28. Growing Democracy: Fewer Bullets, More Ballots
Number of Democratic Countries in SSA*
35
30
25
20
15
10
5
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: Fund for Peace; *Number of countries holding elections
28

29. Positive Economic Outlook
Africa will continue to be fastest growing region in the world, after Asia
Real GDP Growth (%): Developing Regions
14.0
12.0
10.0
8.0
Sub-Saharan Africa
6.0
Central & Eastern Europe
4.0
Developing Asia
2.0
Latin America & the Caribbean
Middle East & North Africa
0.0
-2.0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
-4.0
-6.0
Source: IMF World Economic Outlook, April 2013
29

30. 04
Thoughts on Investing in
Africa

31. Some Observations on Successful Investing in
Africa
➜
Identify the opportunities first, then look to mitigating the risks
➜
➜
➜
The ‘glass is half-full’ (vs. ‘half-empty’!) approach
Requires a mindset shift
Do your homework extensively
➜
Thorough local market research critical
➜
Generalised pre-suppositions/anecdotes won’t cut it
➜
Be willing to put your money where your mouth is (No risk capital, no return!)
➜
Take a ‘portfolio’ approach to investing
➜
A multi-country focus is much better than a single-country bias for risk mitigation
➜
Never compromise your ethics
➜
A long-term approach is critical
➜
‘Over-night success’ stories are few and far between
31

32. 05
What are the
Challenges?

33. The Lingering Challenges
➜
Slow pace of economic diversification and industrialisation
➜
High reliance on primary commodities – agriculture, oil, raw minerals
➜
Agricultural potential still largely untapped, financial markets very shallow, etc.
➜
Low levels of formal employment
➜
Human development indicators still lagging
➜
➜
Poor infrastructure
➜
➜
Unreliable electric power supply, ports, road and rail links
Weak institutional capacity
➜
➜
Per capita incomes, access to education, health, sanitation, technology utilisation, etc.
Public policy planning and execution, judicial, regulatory, customs and border management
Political and economic reforms still need to be accelerated and sustained
33

34. Human Indicators Lag Other Regions, Overall
Number of people in extreme poverty by region and selected countries, base case and accelerated
progress scenarios, 2010-2050 (millions)*
Source: UNDP Human Development Report, 2013 *As per Human Development Report Office calculations. ‘Extreme poverty’ is defined as $1.25 to survive on a day
in purchasing power parity terms.
34

35. Human Development Index (HDI) and Components
by Region and HDI Group (2012)
Source: UNDP Human Development Report, 2013 *As per Human Development Report Office calculations.
35

36. Electric Power Supply and Access to Technology
Electric Power Generation Lags Other
Developing Regions
Internet Penetration Still Among the Lowest,
After South Asia
36

37. Road Infrastructure
Paved Roads as % of Total Road Network
90
80
70
60
2005
50
%
2011
40
30
20
10
0
Middle East &
North Africa
South Asia
World Average
East Asia &
Pacific
Latin America & Sub-Saharan
Caribbean
Africa
37

38. In conclusion…
“A good investor invests where the Alpha is. A
great investor invests where the Alpha is going
to be.” – Michael McMillan
38

39. THANK YOU
39

40. Disclaimer
Information and Content
The information and content (collectively 'information') provided herein are provided by STANLIB Asset Management (“STANLIBAM”) as
general information for information purposes only. STANLIB does not guarantee the suitability or potential value of any information or
particular investment source. Any information herein is not intended nor does it constitute financial, tax, legal, investment, or other advice.
Before making any decision or taking any action regarding your finances, you should consult a qualified Financial Adviser. Nothing contained
herein constitutes a solicitation, recommendation, endorsement or offer by STANLIBAM.
Copyright
The information provided herein are the possession of STANLIBAM and are protected by copyright and intellectual property laws. The
information may not be reproduced or distributed without the explicit consent of STANLIBAM.
Disclaimer
STANLIB has taken care to ensure that all information provided herein is true and accurate. STANLIB will therefore not be held responsible for
any inaccuracies in the information herein. STANLIBAM shall not be responsible and disclaims all loss, liability or expense of any nature
whatsoever which may be attributable (directly, indirectly or consequentially) to the use of the information provided.
STANLIB Asset Management Limited
Registration No: 1969/002753/06. A Financial Services Provider licensed under the Financial Advisory and Intermediary Services Act, 37 of
2002. FSP license No: 719.
40