Edition: June / Aug 2017
Sygnia’s swipe at Allan Gray
Hardly a ‘passive’ attack on CRISA too.
Like other investment managers that seek to comply with CRISA, Allan Gray consistently publishes its record of proxy voting and engagements with investee companies.
Like other investment managers that seek to comply with CRISA, Allan Gray consistently publishes its record of proxy voting and engagements with investee companies. Sygnia doesn’t. This, accompanied by the fact that Sygnia isn’t even a PRI signatory, makes Wierzycka’s outrage seem akin to an atheist telling the Pope how to run his church. Sygnia has made zero contribution to the development of CRISA.
|Wierzyka . . . the great disrupter|
Neither is it in the strongest position to do so because Sygnia is the opposite of an active investor. Its business model claims a competitive edge through low-cost offerings that rely on passive investment; in other words, the tracking of stock-market indices rooted in algorithms. They’re oblivious to the sensitivities of environmental, social and governance (ESG) criteria that lie at the heart of “responsible investment”.
Sygnia is also a multi-manager of investment products. Here it manages its own passive strategies and outsources the active components, according to its latest annual report, to a “wide range of third-party asset managers”.
These managers, it says, are monitored and evaluated in terms of the extent to which they take ESG factors into account. Because one of these third-party asset managers is Allan Gray, it must have passed Sygnia’s requirements for approval. Thus, if Allan Gray is guilty as charged by Wierzycka, then Sygnia is too.
The annual report further reveals: “Managers are encouraged to become signatories to CRISA and this is taken into account in Sygnia’s manager selection process.” That would be difficult. CRISA is a voluntary code to guide investment processes in the same way that King is a voluntary code to guide corporate governance. They don’t have “signatories”.
From where Wierzyka sits, it’s rich for her to belittle CRISA through such statements as “compliance with ESG policies is mere lip service” and these policies being “drafted for PR purposes”. On the first, the dichotomy is in Sygnia’s own operation. On the second, her preemptive strike against Allan Gray – before it knew there was a case to answer – was a masterful exercise in self-promotion.
She’s throwing stones from a glass house, the more so because Sygnia’s own probity might not be entirely beyond reproach. Merely compare the much-vaunted advertising of Sygnia Skeleton Funds “offered at 0,4% p.a.” with the total investment charges shown in the relevant funds’ fact sheets on the Sygnia website.
Try it. Then come to an objective conclusion on whether this is treating customers fairly.