Ashburton CEO Mduduzi Ndlovu has gone from a small house in Soweto to the apex of a multi-billion rand asset manager. But it hasn’t all been an easy ride.
By Phakamisa Ndzamela
Ashburton CEO Mduduzi Ndlovu — known as Duzi to his friends — argues that too often, retirement funds obsess about investing in the stock market, while forgetting about their role as efficient allocators of capital in an economy.
This clearly doesn’t mean funds should take undue risks, of course. But there are certain things that can be done to improve society, especially around infrastructure, and Ndlovu believes pension funds are perfectly placed to help.
“We can build society because of patient capital. Importantly, if you look at South Africa, where savings rates are so low, where people retire with low-replacement ratios of their salaries, we can play an important role … in improving the state of society,” Ndlovu tells Today’s Trustee.
He says that while generating value for pensioners from retirement savings is critical, that value can only be enhanced if it is held in an environment with good social infrastructure — such as roads, healthcare facilities, and public schools.
This accords with the changes made to Regulation 28 of the Pension Funds Act, made in 2022, which hiked the limit for retirement funds to invest in infrastructure to 45%.
Ndlovu knows all about living in a world with limited infrastructure.
He grew up in a modest home — a four-roomed house in Soweto Meadowlands, the typical structure in a township, with a toilet outside the house in a corner of the property. As the second born, sandwiched between two sisters, Ndlovu started his schooling at a township school, Kwa-Phalo Primary on Senzangakhona Street in Meadowlands East.
As things improved at home in the 1980s, however, he swapped to Eden College, a private school with a better educational structure.
“When you grew up in Soweto you had diversity all around you,” he says. “We were growing up in the same street and playing with people who were children of factory workers, children of unemployed people, but also doctors and lawyers and teachers.”
There was a strong culture of achievement at home. His mother was a nurse, but later moved to the sales division of a pharmaceutical company in the late 1970s. And his father was a lawyer who, later, began lecturing at Ongoye University, which is now the University of Zululand. This took the young Mduduzi to Kwazulu-Natal.
His life changed, however, when, at the age of 13, his father died. This meant his mother had to put him, and his siblings, through school and university.
Ndlovu had done well in maths and physics at high school, but loved history too, so was torn about what to study at university. As he was standing in the registration queue at Wits University, a friend of his mentioned he wanted to study accounting, as there were heaps of money in the profession. So Ndlovu registered for a BCom, with accounting and humanities courses.
During vacations, he did stints with an accounting firm, which took him to Genbel Securities (Gensec), a JSE-listed investment firm that was later folded into Sanlam. Ndlovu found himself intrigued by Gensec’s trading desk.
“I said, ‘my word, how I would love to be one of these guys sitting on the trading desk’. One guy was holding two phones on [each] side of his ear, and I thought that looks very cool. That was my introduction to finance,” says Ndlovu.
Luckily for him, Gensec had a training scheme in place for junior analysts — and Ndlovu signed up immediately in 1994. “I wanted to be a trader, but they didn’t let you onto the trading desk from day one. So I spent a year as a trainee analyst and a year and a half later I was a trader.”
The Don Ncube factor
He began, like most people, trading equities, before moving to fixed income. At the time, Ndlovu says, there was a concerted effort by business to bring black people into their ranks.
He left Gensec in 1996, and moved to Real Africa Asset Management — a boutique money management house under the control of veteran businessman Don Ncube.
It was an interesting move, considering he could have joined a larger asset manager, which would not only have paid more, but would have been in need of diversity. So why didn’t he?
Ndlovu says there was greater scope to do a variety of things at the smaller company.
“I respected Don Ncube. I think he had done amazing things … Real Africa for me, Nail (New Africa Investments Limited) and all the black businesses represented possibility, and it was an issue of stepping into possibility.”
Those black companies, to Ndlovu, represented the possibility of excellence. “Too often those were not words said in the same breath,” he says.
At Real Africa Asset Management, Ndlovu began as an analyst, but soon became a portfolio manager looking after equities, fixed income portfolios and balanced funds. At the time, the funds he managed exceeded R3bn; by the time he left, he was acting CEO, managing close to R10bn in assets.
“We managed money on behalf of Sanlam, the Public Investment Corp was a client, Eskom Pension Fund was a client and there was the Munisipale Werknemers-Unie, [which had] a R300m mandate they let me manage,” he says.
That last mandate was notable — as Ndlovu puts it: “you would not ordinarily expect the white part of the municipal workers fund to let a young black guy manage money for them, but they did.”
He learnt plenty from Ncube, Shams Pather and John Scott at Real Africa. Pather had been head of investments at Southern Life, which was owned by Anglo American, but he’d helped the Real Africa consortium buy an equity stake in African Life — pioneering the formation of Real Africa.
Ncube tells Today’s Trustee he remembers the young Ndlovu from those days.
“Real Africa’s cardinal principle was to be a game changer in the lives of disenfranchised black people. A practical example is the employment of Mduduzi and his development into a competent and ethical asset manager. I am not surprised he is [now] the CEO of Ashburton,” he says.
Fred Robertson, the co-founder of the JSE-listed Brimstone Investment Corporation, says Ndlovu contributes sound leadership, vision and good counsel.
“I had the great pleasure of serving on a board of a life assurance company where Duzi was the lead independent director and his attention to detail, balanced with independence and respect for governance, is remarkable,” he tells Today’s Trustee. “He is a fine example of [the sort of] well-respected, new generation, astute investment professional that we need to take our asset management industry into a new realm.”
But Ndlovu’s path to Ashburton hasn’t all been plain sailing.
When he left Real Africa Asset Management in 2004, he co-founded Argon Asset Management with another Sowetan, Mothobi Seseli. To do this, he used equity from his home and didn’t draw a salary for two years. Living off savings wasn’t easy, considering his wife was also pregnant at the time.
His first clients included the Public Investment Corporation (PIC), the Chemical Industries National Provident Fund (CINPF), and Metal Industries Benefit Funds Administrators (MIBFA). But to qualify to manage assets, the regulator required asset managers to have a liquidity reserve — so Ndlovu relied on loans from friends to fill these reserves.
Ndlovu concedes mistakes were made at Argon.
“One of the mistakes we made initially — later it was corrected — was that we thought when you are surrounded by black people, you are diverse,” he says. “But diversity is having people around you who are different. We were diverse from the industry we operated in, but our own internal diversity could have been better.”
In 2008, the global financial crisis hit — and central bankers the world over hit upon quantitative easing, which impacted on portfolios. This was another mistake.
“I was very conservatively positioned. I was not thinking hard enough about the implications of QE1. I held onto my convictions that the world was still in a depressed economic state, as opposed to recognising that all this money supply was going to drive up asset value,” he says.
This meant Argon had too much money sitting in cash. “Going into that quarter I was 2% ahead of the index and by the end of that quarter I was 4% behind. It was a mess … We did not lose clients, but we had very hard conversations,” says Ndlovu.
By 2012, by the time Ndlovu left Argon, it had grown to become a sizeable black-owned asset manager. But it seemed the right thing to do, since the partners had irreconcilable views about the strategic direction of the business.
At the end of 2013, he moved to Crede Capital, which had been founded by Sandile Sokhela. He stayed there for a number of years before, in 2021, he opted to join Ashburton, which had just hired the respected financial analyst Patrice Rassou as chief investment officer.
Finally, in March 2022, Ndlovu succeeded Sizwe Nxedlana as CEO of Ashburton.
“We have got a great business in fixed income. But really, if we can grow our equities business and our infrastructure business, those are key goals for us,” he says.
At home, there’s been far less change. A devout Christian who wakes up with prayers in the morning, Ndlovu has three boys and a wife. He attributes his trajectory to a combination of hard work, good luck and his faith.
So what would his one piece of advice be for young investment professionals? He answers: “The utility of money is quite interesting, because when you do not have it, you prize it a lot. It is not money that must make you wake up in the morning. You must love your job; you must matter to the people you love, and they must matter to you. Love what you do and love your family.”