Meeting Johan Steyn, Portfolio Manager, Prescient Investment Management

  • Q: How did you get involved in financial services - was it always something you wanted to do?
  • A: Yes, at school I enjoyed maths and accounting, so something related to finance seemed like a logical choice. Accounting seemed a bit too dull and actuarial science a bit too statistical. I opted for investments and haven’t looked back since. Completing the CFA exams and becoming a charter holder became a priority. Now I’m fortunate to do something I love doing every day and call it work. I think a lot of people dread their day job and I consider myself lucky to not be one of them. I can’t really see myself doing anything else.

  • Q: Investing in Africa is high risk? True or false or a bit of both?
  • A: I think it’s true for most definitions of risk. Most African markets are considered to be ‘Frontier Markets’ and have historically displayed higher levels of volatility than more developed markets. However, with the higher risk also comes the opportunity for higher returns. Due to the superior potential for long term growth, as well as their uncorrelated nature to SA equities, a strong case could be made for a small but meaningful allocation to Africa ex SA equities.

  • Q: Some investors believe they have sufficient exposure to Africa via the big SA corporates currently in Africa - what more is available?
  • A: Sure, there are ways to get some Africa exposure via the JSE listed corporates that have an African footprint or have an Africa expansion strategy. However, the ex-SA revenue exposure for most of these companies still only makes up a small portion of total revenue. The majority of their revenue base is still from SA, for example Shoprite, although marginal revenue growth is coming from faster growing African economies. MTN is perhaps an exception, where the majority of the revenue base is generated outside SA. There are ways to access opportunities in these fast growing markets like Nigeria and Kenya in a more direct way. One way is through the Prescient Africa Equity unit trust fund which is priced in Rand.

  • Q: What is the best and worst investment advice you have heard?
  • A: The best advice was probably to avoid making investment decisions based on emotions. So if you have to choose between relying on the facts and your ‘gut-feel’, you should give higher weighting to the facts. The worst advice must be something related to the opposite: trust your gut, or ‘think about all the money you can make’. A ‘greed-bias’ can be very detrimental to investment returns.

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