Increase in global asset managers entering SA – is there room for more competition?
By Philip Robotham, Head of South Africa, Client Group at Schroders in South Africa
Philip Robotham, Head of South Africa, Client Group at global investment manager, Schroders writes that although competition is increasingly stiff, there is a place for offshore managers who can prove their pudding.
Investors are increasingly allocating funds to offshore assets. According to the AlexForbes Large Manager Watch survey, the average offshore allocation in balanced funds available in South Africa has increased from 27% in March 2022 (when National Treasury increased the offshore allowance to 45%), to 38% as at June 2025.
The explosion in offshore investment interest from South African retail and institutional investors in the last decade comes as result of several interlinking factors – including increasing regulatory appetite for offshore exposure in investment funds, a shrinking stock universe on the Johannesburg Stock Exchange (JSE) and macroeconomic shifts necessitating a broader search for alpha.
Alongside several local asset managers creating their own offshore products, the increase in demand for global investment exposure has also been met with an influx of offshore managers setting up shop in South Africa. And the trend looks set to continue.
But is there room in SA for more global managers?
A dwindling savings pool, a stagnating economy, complex regulatory requirements, and an already-competitive local financial services market – some could argue that the pond is drying up for offshore managers looking to secure local clients.
But the number of global managers coming to South African shores continues to increase, demonstrating that there is opportunity being seen in the SA market.
And an increase in competition will ultimately be a good thing for South African investors as investor outcomes should improve and costs will likely come down. That said, it will also have a significant impact on the local asset management industry as product providers will need to be globally relevant to survive. This could result in industry consolidation.
But, for offshore managers – and local managers – offering an offshore capability, there is definitely a place in South Africa.
Asset allocators will increasingly look for managers who are able to pool on global resources and tap into local, on-the-ground knowledge in key geographies. Being able to understand local nuances and client needs is a key differentiator in a world of fierce competition.
The proof will also be in the pudding, as managers will need to be able to demonstrate that their offshore capabilities are delivering. As an example, 76% of Schroders funds outperformed their reference benchmarks over a period of 5 years as at 30 June 2025.
Delivering on client mandates is critical to being able to thrive and survive in an increasingly competitive marketplace.
