Solid financial results for Coronation Fund Managers as assets under management rise

Coronation Fund Managers, the independent majority black-owned asset management company, lifted its interim dividend by 8.1% to 200 cents a share for the six months to March 31 over the same time last year after 92% of its investment funds outperformed their benchmarks since inception.

Revenue increased by 8% to R2.04 billion. Total assets under management (AUM) increased marginally to R676bn (September 30, 2024: R667bn), while average AUM increased by 9% to R677bn (March 31, 2024: R619bn).

“We have delivered solid interim financial results under challenging circumstances. Our clients continue to benefit from our globally integrated research capability, active asset allocation and stock picking, as well as excellent client service,” chairperson Alexandra Watson and CEO Anton Pillay commented in the results statement.

“Long-term outperformance in our South African portfolios remains outstanding at 98%, and we are optimistic about the strong recent recovery in our global portfolios,” they said.

Fund management earnings per share increased by 8% to 200.2 cents, up from 185.8 cents in the previous corresponding period. Fund management earnings are used by management to measure operating financial performance and exclude the impact of fair value gains and losses and related foreign exchange movements on investment securities held for seeding products.

The directors said it was a time of increased volatility and uncertainty, where far-reaching decisions were being made by global leaders on an almost daily basis.

"It is during times like these that an active investment manager like Coronation, with a long-term, fundamental investment philosophy, has the potential to add significant value to our client portfolios,” they said.

They said they were excited about the many “excellent opportunities” that had arisen, and the globally integrated team was well positioned to take advantage “of this extraordinary moment in history.”

“We will continue to meticulously manage and invest in our business, so that we remain true to our purpose: to deliver excellent investment outperformance for the benefit of all stakeholders,” they said.

The past six months under review were marked by heightened market volatility, as the US administration’s stance on trade tariffs and protectionism created significant uncertainty in an increasingly polarised world.

In South Africa, these global tensions were exacerbated by disagreement within the Government of National Unity, stemming from dissent over the 2025 Budget.

“This unwound much of the positive rerating we saw after the formation of the GNU following the 2024 election. In this complex operating environment, we have remained true to our long-term investment philosophy and continue to invest strategically in the sustainability of our business.”

“Our 52% effective black ownership aligns us with the national transformation imperative, while our 33% employee ownership aligns the interests of employees with those of our other stakeholders, they said. 

Net outflows moderated year on year to 3% from 4% of average AUM. The directors said that while this was encouraging, the South African savings and investment industry had been contracting for well over a decade.

“This is due to high unemployment, significant indebtedness, and low economic growth, among other factors. We expect industry outflows to continue until we see sufficient economic growth to reverse these trends,” Watson and Pillay stated.

Coronation’s share price gained 1.98% Tuesday afternoon to R39.51, and the price has gained 13% over a year.

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