The first job Lyle Sankar, the new CEO of PSG Asset Management (PSGAM), had after graduating from the University of Cape Town was in auditing, doing his articles at Deloitte.
But he says it was never his intended career path, and as soon as he could, he left.
His first job in asset management was in institutional business development at Coronation Fund Managers in 2013 under Kirshni Totaram. Within a year, in June 2014, he joined PSG as a credit analyst and market trader, and was appointed as a portfolio manager in 2018.
Sankar is now moving up from being head of fixed income at PSGAM to take responsibility for managing the business full time.
Ané Craig has been appointed to replace him at fixed income, after having co-managed the PSG Diversified Income Fund with Sankar and PSGAM chief investment officer John Gilchrist.
Sankar, pushing 40, takes over from Anet Ahern, who in the past 12 years has transformed PSGAM from a microboutique with just R6bn under management to a medium-sized asset manager of R60bn. Ahern will be an active chair of the business for at least two years, but Sankar says he will be flying solo as CEO from day one.
Ahern will still be active in the offshore PSG offices, and has altruistically agreed to fly to the Mediterranean to attend the board meetings of the group’s Malta unit.
Sankar says he will be leaving the investment team to run the process, but he will be an optional attendee at the investment meetings. “This is not a centralised business, with accountability across the team, and I won’t change that.”
But he aims to lead from the front, coming into the offices in Constantia, Cape Town, every day if possible, even though the business still operates on hybrid work model with an expected two days a week in the office.
PSG has grown on the back of good long-term investment returns across fixed income, balanced funds and local and global equity. It has avoided esoteric areas such as hedge funds and private equities. It is unashamedly an active manager, based on old-fashioned fundamental company research, with no plans to enter the passive or index fund market.
Like all fund managers, it can’t avoid a few disappointing years. Last year its concentrated Global Equity Fund was a laggard, as it had limited exposure to the Magnificent 7 — though the fund has recovered in relative terms year to date.
This is not a centralised business, with accountability across the team, and I won’t change that
— Lyle Sankar
Over the past five years PSGAM’s headline earnings have almost trebled, from R105m to R297m. It now accounts for 23% of the profit of the listed PSG Financial Services Group, with 17% for PSG Insurance, the short-term insurance broker and underwriter. The core of the business remains PSG Wealth, which accounts for 60% of earnings.
Outside the big life offices such as Old Mutual and Sanlam, it is the largest national network of financial advisers.
Sankar describes PSG Wealth as a key partner, but the two businesses operate autonomously. “We certainly don’t get automatic support. We need to earn it through investment performance.” At the legendary annual group conference at Sun City, for example, PSG Asset Management doesn’t get a preferential platform; its competitors are also given the chance to showcase their products to PSG brokers.
He says PSGAM has the PSG group culture and DNA, which is highly entrepreneurial and is neither rigid nor hierarchical.
As asset management is a scalable business, Sankar does not expect the staff to increase substantially, even if assets under management double. There is a staff of 90, including the PSG management company and 20 members of the investment team.
PSG has a simple architecture, as it operates entirely in the unit trust market; it does not offer life portfolios or segregated funds. It is focused on the retail market, in which there are higher margins than in the higher-volume pension fund market.
But the retail market has become more sophisticated. A great deal of Sankar’s time will be spent interacting with the main gatekeepers in the retail market. These are the discretionary fund managers (DFMs), which provide model portfolios (also called wrap funds) and funds of funds to independent financial advisers. PSG Wealth’s own multimanager acts as the group’s in-house DFM.
Sankar says he enjoyed the people management side of running the fixed income team, which is what marked him out as a possible candidate for the CEO job.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.