Investing for generations to come – i3 Summit 2018

Investing for generations to come:

The 2018 i3 Summit sketches a future-fit financial world

‘A future to thrive in’ was the theme of the 2018 i3 Summit, hosted by Sanlam Investments and Glacier by Sanlam. Spier Wine Farm hosted the Cape Town event on 22 May, while the Johannesburg event took place at the Sandton Convention Centre on 24 May 2018. In total, more than 600 delegates attended the events. The agenda featured an exciting line-up of esteemed political figures and several investment specialists at the pinnacle of their careers, such as Minister Pravin Gordhan, former Greek Minister of Finance Yanis Varoufakis, political analyst Aubrey Matshiqi, fund manager Delphine Govender, blockchain advisory board member Monica Singer and AI specialist David Itzkovits.

This was the fifth i3 Summit – an international investment conference at which Sanlam Investments and Glacier by Sanlam host experts in economics, politics and the investment industry, independent thinkers with a keen eye for future developments. This year’s Summit also marks the centenary celebrations of Sanlam and Khanyi Nzukuma, chief executive of Glacier by Sanlam, pointed out that, ‘Sanlam would not have survived for 100 years if it wasn’t able to adapt to always evolving client needs and several generations of disruptive technology along its way.’ Carl Roothman, chief executive of Sanlam Multi Management shared at the Johannesburg i3 Summit, ‘We’ve learned that business should not be quiet; we need to be vocal in the industry to champion and grow inclusivity.’

Without a strong economic system and reliable service delivery, neither inclusivity nor successful investing is possible. The first keynote speaker, Minister Pravin Gordhan, currently Minister of Public Enterprises and formerly Minister of Finance of South Africa, addressed the need for sustainable economic growth. Minister Gordhan stressed that ‘the current situation where three-quarters of the population find themselves outside of the economy is a recipe for disaster’. He stated government imperatives as being inclusive growth, skills training (‘not to be confused with higher education’) and the improved capability of the state (including the rooting out of corruption).

Minister Gordhan reminded the audience that ‘the money lost to state capture is an opportunity lost to the people of South Africa. We have to find the money and bring it back to this country. And there must be consequences for the perpetrators.’ Minister Gordhan is positive that state-owned enterprises can be turned around to become less dependent on the fiscus. He pointed out that civil society has a key role to play in reducing state capture and asked delegates to keep government accountable. The Minister also raised the point that there exists in the country ‘corporate capture’ and that the way forward is to ‘limit the discretionary power of all individuals’ (including directors of corporates). He is also concerned about the high levels of income inequality within companies.

Next up was Aubrey Matshiqi, highly rated South African political analyst and strategist at the Premier’s Office in Gauteng. Aubrey reminded delegates that South Africans are prone to overreaction and while ‘we had hysterical pessimism during the Zuma era, we now have hysterical optimism. The truth lies somewhere in-between.’ He mentioned areas where President Ramaphosa is currently hamstrung, and that while the recent NEC election handed the leadership to Ramaphosa, ‘it didn’t necessarily hand him the party or political platform he needs.’ Aubrey expressed his concern that South Africa remains a divided nation in that ‘we have conflicting views of what constitutes a civilized society’.

The Summit’s international keynote speaker, Yanis Varoufakis, was the finance minister of Greece during the 2015 referendum. Like Gordhan, he has faced a downgrade of sovereign debt and a challenging economic epoch during his time in the ministry. In 2015 Yanis fought to fend off an increased debt load on the Greeks and stated that ‘Greece should be important to you. It is the canary in the mine.’ ‘If you humiliate a nation and crush them financially, you can expect a Nazi-like movement to take off,’ Yanis warned and that was exactly what he wanted to prevent with the Greece referendum in 2015. He believes that European policies are currently destabilizing the economy and that ‘there can be no global economic equilibrium without the US leading the way and the EU and China cooperating.’ Yanis looks toward green technology, blockchain and renewable energy as sustainable investments for the future.

No summit on the future of investing would be complete without a thorough look at the possibilities created by blockchain technology. Monica Singer was the speaker on this topic. She was the first CEO of South Africa’s Central Securities Depository, Strate, but resigned in 2017 to concentrate on bringing blockchain technology to relevant industries. To say that Monica is excited about blockchain’s potential to lower costs and make transactions and data safer, would be an understatement. Blockchain is, in her words ‘the part of the internet that’s been missing all along – the enabler of the transfer of value.’ It will make certain investment platforms and administrators obsolete in the future, Monica believes. She encouraged delegates to start learning all they can about initial coin offerings as high-risk, but potentially lucrative investment opportunities.

Delphine Govender, founder and CIO of Perpetua Investment Managers, spoke about the current convergence of employee benefits and retail investing. She emphasised that the investor client journey has changed and retirement is no longer the sole ‘big goal’ that investors try and achieve; ‘there are several different goals along the way for which we need to cater’. Delphine also argued that the costs of unit trusts must come down and that it will be the disruptors in the market that will make this a reality.

David Itzkovits, CEO of Sanlam Global Investment Solutions, covered the role that artificial intelligence (AI) is already playing in our lives – eliminating credit card fraud, to analyse legal contracts, and to simply do an online search. David is looking forward to the extent to which machine learning will lead to investment advice being offered to all levels of investors in the future, even those with very small amounts to invest. ‘In the end,’ David concluded and with this statement captured the essence of the 2018 i3 Summit, ‘the future is not about man versus machine, but man with machine versus man without.’