Coronation grows AUM and core earnings in a volatile global and local climate

Key topics:AUM up 14% to R761bn; revenue up 10% on stronger feesNormalised fund management EPS rose 12% y/yStatutory profit down 24% after prior-year SARS benefit reversalSign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..BizNews Reporter.Coronation Fund Managers, the owner-managed and investment-led firm, reported its condensed consolidated financial statements for the year ended 30 September 2025, highlighting a positive operational year marked by excellent client returns despite navigating significant market volatility both locally and globally. While statutory profit metrics showed large year-on-year declines, these declines were primarily due to non-recurring prior-year tax benefits.The Good: Operational strength and client outperformanceRobust AUM and revenue growth: Coronation reported solid financial results underpinned by strong investment performance and prudent cost management. Total assets under management (AUM) increased significantly by 14%, reaching R761 billion (up from R667 billion in 2024). Average AUM also increased by 12% to R705 billion. Revenue from fund management activities rose by 10% year on year (y/y). This revenue growth was driven by an 11% increase in management fees and a 3% increase in performance fees.Normalised earnings increase: To provide a clearer view of core business activities, Coronation focuses on fund management earnings, excluding non-operational items. Fund management earnings per share (excluding the impact of the 2024 South African Revenue Service (SARS) matter) were up 12% y/y, reaching 452.2 cents per share (compared to 402.9 cents in 2024). This operational growth was achieved while maintaining disciplined control over expenditure, as total operating expenses rose by just 4% y/y.Exemplary investment track record: The year was marked by excellent returns for clients, benefiting from compelling outperformance and astute asset allocation. Coronation reaffirmed its long-term investment success, reporting that 95% of funds outperformed their benchmarks since inception, 90% outperformed over 20 years, and 87% outperformed over 10 years. This long-term capability has been internationally recognised, with Coronation winning the Emerging Markets Manager of the Year at the Pensions Age2 Awards in 2025. The firm’s established global expertise is deemed strategically important, especially since Regulation 28 increased the offshore allowance for retirement funds to 45%.Commitment to transformation and future investment: Coronation maintained its status as a Level 1 B-BBEE contributor since 2021. With 52% black ownership, the firm remains the largest independent, majority black-owned asset manager in South Africa. Furthermore, the company continues to make disciplined investments to "future-proof" the business, focusing on product innovation (including actively managed exchange-traded funds), information systems and technology (including AI and cybersecurity), international distribution, and talent retention..The Bad: Statutory declines and market headwindsSharp drop in reported profit and EPS: Statutory financial results showed substantial declines, largely attributable to the reversal of the non-recurring liability from the SARS matter, which was fully recognised as a gain in the 2024 financial year. As a result, profit for the year declined by 24% to R1,676 million (down from R2,205 million in 2024). Similarly, basic and diluted Earnings Per Share (EPS) dropped by 25%, falling from 630.5 cents to 474.3 cents.Pressured local savings industry: Despite strong operational performance, Coronation remains exposed to negative industry trends in the South African savings market. The local industry continued its long-term trend of contraction in 2025 due to sustained pressure on South African consumers and rising unemployment. The implementation of the Two-pot Retirement System also added to these structural headwinds. Although Coronation’s client outflows moderated, they still amounted to 5% of average AUM y/y, and the company does not anticipate rapid industry improvements in the foreseeable future.Volatile operating environment: The year presented challenging market dynamics. Globally, capital markets experienced immense uncertainty and exceptional volatility driven by the inauguration of the new US administration, shifts in geopolitical alignment, threats of major trade tariffs, and the disruptive potential of artificial intelligence. Locally, the protracted 2025 National Budget approval process aggravated tensions within the Government of National Unity, escalating local volatility.Leadership changes: The company saw several key board changes. Professor Alex Watson retired as Chairperson and independent non-executive director, and Mr. Saks Ntombela was appointed as the new Chairperson. Additionally, Ms. Mary-Anne Musekiwa resigned as financial director in June 2025 to pursue an offshore opportunity.Coronation's ability to achieve significant AUM growth and a 12% increase in normalised fund management earnings per share, despite widespread industry headwinds and global uncertainty, suggests that its disciplined, long-term investment approach continues to function effectively. However, the continued exposure to outflows within the constrained local savings market remains a structural challenge..Read the results in full by downloading the PDF below

Coronation grows AUM and core earnings in a volatile global and local climate

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