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PSG Asset Management

PSG Collective Investments

PSG Collective Investments is a composite international and local asset management, stockbroking and investment management group listed in the financial services sector of the Johannesburg Stock Exchange. After owning 28% of the shares of the Appleton for some time, PSG Investment Services became the owner of the company in January 2003, and Appleton was delisted from the JSE in April 2003.

After the merger of PSG Investment Services and Appleton Ltd April 2003, the unit trusts of both companies were initially managed by the two separate companies. However, in February 2005 investors voted for the amalgamation of the funds. The consolidated scheme is now known as the PSG Collective Investment Scheme and the manager of the scheme is the PSG Management Company Ltd.

PSG Collective Investments offer a range of products to suit the investment needs of private, retail and institutional clients. The philosophy of the company is to allow investors access to the best investment talent, while actively managing all investment decisions.

Products and services
Unit Trusts
Private Client Portfolios
Structured Products
Institutional Funds
Cash Management Funds

Investment philosophy
According to the company website, the company are neither growth nor value managers, as "…an appropriate mix of both value and growth strategies delivers superior returns in most market conditions. For the same reason, we also occasionally take contrarian views.

"Our disciplined, top down approach to asset management allows us to first identify macro investment themes and trends. We have a flexible approach to asset allocation, favouring those assets able to offer the best risk-adjusted returns at the time.

"Once macro economic and asset allocation themes and trends are established, these views are distilled to create a stock selection matrix, which is used as the basis of all the portfolios we manage. As our stock selection is automatically influenced by macro trends, growth stocks only form part of the matrix during growth phases of the economy, while value stocks will be selected when prices are considered cheap.

Unit Trusts
Total assets under management: R15 billion
Unit trusts under management: R1.72 billion (March 2005)
First unit trust launched: 1999
Number of unit trusts: 10.

PSG Collective Investments in the news

PSGIS Sells Appleton London Business For £1.5-Million (Press Release 04/08/2003)
PSG Investment Services, a division of JSE-listed PSG Group, has sold the Appleton International Limited business in London, toglobal asset management company, Integrated Asset Management Plc (Integrated) for £1.5-million. Appleton International Limited is a specialist investment boutique focused on multi-management investment in alternative styles. Under the agreement, Integrated will acquire Appleton’s UK hedge fund operations, including the Condor European and Kingfisher funds.

"This strategic decision to dispose of Appleton’s hedge fund operations in London follows careful consideration," says PSGIS CEO Jaap du Toit. "For PSGIS, the deal is not only favourable from a financial point of view, it also means that the company maintains access to the same capability, without having to own and oversee a specialist offshore operation."

PSG Group and stockbroker Tradek combined to form a new empowerment asset manager. (Business Day, 16/09/2003)
PSG Investment Services sold 90% of its institutional fund management business to Tradek, in which an empowerment consortium has a 70% stake. The new business is to be named Argon Asset Management.

(Subsequent to this development, Argon Asset Management became a wholly black owner managed asset management business. All the equity now resides with management and staff, lead by Mothobi Seseli (Managing Director) and Mduduzi Ndlovu (Chief Investment Officer). The 9 professional member team’s focus is largely on the institutional market segment (including retirement funds and medical schemes) with an offering that includes specialist value equity, specialist fixed income (core bond, enhanced cash and money market) and blended multi asset class strategies with either a relative return benchmark or inflation target.)

PSG reports 30% leap in earnings (Business Report 07/10/2003)
During the past year PSG has undergone a complete makeover shedding all banking operations and reinventing itself primarily as an investment company. It sold PSG Investment Bank to ABSA, and last week exited the banking sector completely by unbundling its shares in low-income bank Capitec to its existing shareholders.

Over the last six months, however, PSG Investment Services earnings have been a disappointment. It made a loss of R400 000 from the previous year’s R7.8 million positive contribution. Part of the problem was Investment Services’ acquisition of Appleton during the year, which weighed heavily on the company’s bottom line profit.

PSG holds 20% of M Cubed, a company which appears to be surviving the tough investment market.

Appleton reports loss (Press release 26/02/03)
Noting that a recovery strategy was underway, financial services group Appleton reports disappointing results, having run up net attributable losses of R11.9 million for the six months ended December 31, down from a profit of R7.7 million for the year earlier period. Gross revenue crashed to R53 million from R73 million. Funds under management in South Africa dropped by nine per cent to R1.5 billion.

Huge pay-offs for directors (Business Day 26/02/03)
Although private client stockbroker and asset manager Appleton made a headline loss of R10.2 million for the six months to the end of December, two of its directors are set to receive golden handshake pay-outs of more than R1.5million each, including an unusual payment for a 12-month notice period. At the same time about a third of Appleton's workforce faces the axe in order to cut costs. PSG Investment Services bought Appleton at the end of last year and said it would have to axe 62 jobs.

PSG Appleton Merger: More Details (Equinox article Jan 4th 2005)

Since the merger of PSG Investment Services and Appleton Ltd, which was approved in April 2003, the unit trusts of both companies have continued to be managed by the two separate companies. In order to manage all the portfolios under one scheme, PSG require the consent of unit holders in the different funds.

PSG propose that the management of all the portfolios under one scheme would streamline the business unit and be beneficial for investors. If the proposal is accepted the consolidated scheme will be known as PSG Collective Investment Scheme and the manager of the scheme will be PSG Management Company Ltd.

PSG has designed the ballot forms so that investors vote for the new structure, as well as, in some cases, the amalgamation, change of mandate and use of a new name for some of the unit trust funds.

Successful PSG Appleton Ballot (Equinox article Feb 25th 2005)

PSG has announced that the ballot requesting unit holders' permission to merge PSG and Appleton unit trust funds was successful. Where appropriate, units of affected funds will be amalgamated on March 1st, 2005.

Spokesman for PSG Fund Managers, Lynette Steinhofel said that the use of Alphen in some of the fund names was in recognition of the fact that the funds in question were managed by Alphen Asset Management.

'The old PSG Asset Management team became Alphen Asset Management last year as a result of a management buy out. Our asset management team is thus jointly owned by the fund managers and PSG Asset Management,' she said. 'In addition Alphen Asset Management co-manage several other PSG funds.'

Alphen: The new (ish) kids on the block (Equinox article March 24h 2005)

Alphen Asset Management is a niche asset management company which is 50% owned by management and 50% by PSG Fund Management. The total current asset base is nearly R1.4bn. While many of the members of the Alphen team have worked together for some time, Alphen was launched in September 2004.

PSG-reared Channel Life is latest to stand alone (May 2005)

Finanical services group PSG is building empires, but selling them off as they reach maturity and look for independence. This is the group's philosophy, which it admits makes it hard for it ever to become a large capitalisation player in the market place.

Channel Life's planned listing in 2007, which will start with over-the-counter sales as early as next month, is part of its parent company's strategy to develop businesses and entrepreneurs in the financial sector. Channel Life will become the latest in a string of companies to be listed by PSG. Others include Capitec Bank, unbundled to shareholders last year; PSG Konsult, which is planning a listing, and Arch Equity, the empowerment group started by former African National Congress MP Desmond Lockey and which listed on AltX last month. PSG retains 20% in Arch Equity, which owns 22% of PSG.

Website: http://www.psgfm.co.za

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