News & Insights

Mergence has launched a second AMC within its Global Quant Equity Portfolio, following excellent one-year performance of the first fund which outperformed its benchmark, the MSCI World index, by 5% over 2024 and returning 28% over the year.

Fazila Manjoo, Portfolio Manager, spoke to Citywire editor, Ruan Jooste, sharing insights into the portfolio’s performance, investment philosophy, and outlook for 2025.

Commenting on ABSA’s search for a replacement CEO, Mergence Co-Portfolio Manager, Radebe Sipamla, said that while appointing the current acting CEO into the role on a permanent basis makes sense, it would be important for him to actively to groom potential successors with transformation a key focal point in succession planning.

Commenting widely on the South African telecoms sector – 2024 in review and the 2025 outlook – Mergence Head: Equities, Peter Takaendesa, said that South Africa’s telecoms sector has been going downhill since peaking in 2022 and has not been attractive to investors especially when compared to other South African domestic stocks. There are multiple reasons for the operating cost pressure on mobile operators, including load shedding and a weaker rand over the past few years. Peter cites other challenges facing Vodacom and MTN and notes that only Telkom has surprised on the upside.

In this article on Citywire, Mohamed Ismail, Head: Fixed Income at Mergence Investment Managers, talked to editor, Ruan Jooste, about the Mergence Infrastructure & Development | Bond Composite Fund, an innovative product launched in 2018. Positioned ahead of regulatory changes, this fund was one of the first to offer investors access to a diversified mix of infrastructure debt assets alongside investment grade listed securities, giving investors the benefits of long-term steady returns of infrastructure as an asset class with the benefit of liquidity.

The latest Naspers/Prosus financial results show a jump in profitability across the group’s ecommerce portfolio and Tencent growth acceleration. Commenting on News24, Peter Takaendesa, Head: Equities at Mergence Investment Managers, said that with about $10 bn available for investment, Mergence expects the group to continue to leverage AI to drive efficiencies in all their global operations. Regarding Prosus, while it has been pushing profitability in its ecommerce portfolio, it still battles with a hefty discount at which its shares trade, with its stake in Chinese tech giant Tencent overshadowing the rest of the business. However, non-Tencent assets in aggregate are now close to an inflection point as they shift into profitability. This trend together with the continuation of open-ended share buybacks should ultimately drive the narrowing of the discount to NAV.

Daily Maverick picks up the water story, outlining the challenges facing Johannesburg and the urgent need for action. The private sector can make a significant contribution, via Public-Private Partnerships, such as Mergence Investment Managers has done with SA Water Works, successfully managing the only two private water concessions in South Africa. Kasief Isaacs, Head: Private Markets, and Chito Siame, Investment Principal, at Mergence are quoted on how the PPP model could be replicated and the need to learn lessons from other geographies which are also facing water challenges.

While Virgin Mobile was perhaps South Africa’s best known mobile virtual network operator (MVNO), two new players have recently entered the market: C-CONNECT and Melon Mobile. Commenting on the development, Peter Takaendesa, Head: Equities at Mergence Investment Managers, said that the segment can expect the traditional mobile network operators to fight back aggressively at some point if MVNOs reach anywhere closer to 10% active customer market share. In addition, MVNOs will all have to find their niche when it comes to the right market fit, which includes offering value for money, if they are to make any difference in the market.

The world of AI today feels like a frontier town back in the Wild West. The atmosphere is thick with danger, opportunity and a sense of the unknown. What does the future hold for the Magnificent Seven, the group of mega cap stocks that have invested heavily in AI infrastructure? Fazila Manjoo, Portfolio Manager at Mergence Investment Managers, gives us her view in the Financial Mail.

Commenting on Anglo American’s SA divestment strategy, Izak van Niekerk, Portfolio Manager at Mergence Investment Managers, gives his views on the news of Anglo’s sale of Australian coal assets to Peabody. On convincing the market of their divestment strategy, Izak says that Anglo’s sale of the metallurgical coal business is one of many steps of the divestment strategy and likely one of the (relatively) easier steps. He thinks the big step will be the successful demerger of Anglo American Platinum which is expected by the middle of 2025 only.

Business Day takes a closer look at the R6,5bn deal where by a Harith-led consortium has bought certain assets to make the Harith infraco a powerhouse in the African infrastructure investment landscape.