RMI Holdings, Yellowwoods back CoreShares

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Gareth Stobie, MD of CoreShares
Gareth Stobie, MD of CoreShares

Today passive investment house CoreShares announced its agreement to partner with pre-eminent financial services holding companies RMI Holdings and Yellowwoods Capital Holdings.

RMI Holdings announced its intention in September 2015 to buy a 25% stake in CoreShares, a company in Grindrod’s financial services division. RMI holds material investments in Momentum (MMI) and Discovery, and controlling stakes in OUTsurance and RMB Structured Insurance. RMI Holdings’ investment in CoreShares will form part of its new RMI Affiliates model.

Yellowwoods Capital Holdings is to also acquire 25% of CoreShares. Yellowwoods is a member of the Europe basedglobal investment and private equity focused Yellowwoods Group with investments in Hollard Insurance, Clientele Life, and Lombard amongst others.

Read also: Gareth Stobie: Going beyond the ETF-obvious with “smart beta”

“CoreShares is excited to be working with both Yellowwoods and RMI Holdings,” said Gareth Stobie, MD of CoreShares. “Together with Grindrod, we have excellent partners with the right chemistry, capital and strategy to make a meaningful difference to the South African investment landscape.”

“Aside from the solid endorsement of our business, the new shareholders will assist us with additional growth capital and access to potential networks and distribution channels”.

Stobie sees scope for the passive investment market to grow in South Africa as it has done globally. “Most active managers are underperforming their benchmarks and their value proposition relative to the developments within the smart beta space are under scrutiny” he said.

Read also: Gareth Stobie: ETFs 101 – How to beat 75% of active asset managers

The investment house, which manages six exchange traded funds (ETFs), has gained traction in the passive investment market particularly with its smart or enhanced beta products and services. Its two flagship ETFs, the CoreShares S&P SA Dividend Aristocrats and CoreShares S&P SA Low Volatility, both tracking smart beta strategies, have achieved “excellent results”.

CoreShares is looking to expand its smart beta offering as well as offer multi-asset and global exposures.

CoreShares will extend its services to portfolio management and unit trusts within the passive market. A digital investment platform is also planned for the first half of 2016 to enable direct retail investors who don’t yet have access to the Johannesburg Stock Exchange to seamlessly buy ETFs.

The transaction remains subject to regulatory approval.