Being an entrepreneur is part of his DNA, says Anchor Capital CEO Peter Armitage, a firm believer in helping people solve problems.
Anchor Capital CEO Peter Armitage has always been passionate about global financial markets. He cut his teeth at Deutsche Bank as an analyst after training as a chartered accountant at Deloitte. He has also worked as head of research and CFO.
Being an entrepreneur runs in his blood, says Peter, born in a caravan park in Boksburg. “And we worked our way up. People love that story,” he chuckles. It’s not quite what it appears, though; he concedes that his dad did own the park. “I’ve always been an entrepreneur,” he stresses, though. “I used to sell chocolates out of my rucksack in primary school and learnt about bad debts then.”
Following his entrepreneurial dream led to the birth of Anchor Capital. While working at Investec Wealth & Investment as the chief investment officer, Peter and two colleagues came up with the idea of starting the investment firm.
Leaving Investec, a great company that provided him with great opportunities, was not an easy decision, Peter says, but he felt the need to follow his dream.
“Fast forward 12 years later, from a group point of view, we’ve got R250 billion worth of assets, and we are the largest independent wealth and asset manager in South Africa, with 500 people and offices around the country. And we’ve specialised in working with corporates and people to solve their investment solutions,” he notes.
Some of Anchor’s more prominent clients include the Deloitte Pension Fund, Peter’s early stomping ground.
“Anchor has grown up very quickly and has been the fastest-growing asset manager in the country, but this growth has not been without its challenges and we’ve had to compete against the big dogs. We’ve always found a niche or a way to add value. Whereas with bigger companies, you’re a number, with us, we’ve had to do something different from a service and product perspective, and that’s worked.”
Anchor Capital describes itself as an asset and wealth management business with a separate institutional stockbroking business. Most of the group’s assets are managed by the Anchor Capital business, with various partially owned partner businesses providing financial advice and other financial services.
The value Anchor Capital offers to corporate CFOs, says Peter, lies with its treasury management services. “I think with treasury management, there’s a tremendous amount of value to be garnered from optimising how you deploy the capital you’ve got. So, we have a team of people who are fully on top of everything to do with yields. Whereas with many CFOs, they are the only person who is supposed to have that expertise in the business, but that is something that needs constant attention. Our fixed income team is constantly assessing the changing markets,” he notes.
“We also have an economic unit, and the rand dollar exchange is often one of the biggest drivers of companies in South Africa, either directly or indirectly. The CFO is expected to be an expert in income, yield, duration of assets, rand, dollar, local versus offshore, and where we’ve worked well with CFOs and companies is being their outsourced experts on all of those things,” he adds.
“Everybody's needs are different, so we’ve worked out what the company wants, and we service them in the way they want. I think just having a trusted partner who will give you a service – and you get on with your day job – is where we are being valued.”
But they’re not just focused on the numbers. They’re really emphasising human expertise and personalised service even in this age of tech-driven solutions. Peter does not consider technology as a key differentiating factor in the marketplace.
“We’re not a business that is solving your problems with a technology solution. We have all the standard tools and technology approaches, but ours is about service and delivery of investment returns. We use a significant amount of technology, and increasingly, the ability to analyse companies and markets is assisted and aided by artificial intelligence (AI). Still, it’s not the key selling point in terms of what we do and how we differentiate ourselves.”
Peter also adds that they’re intrigued by technology within their own business. “It’s an exciting time: I lived through the 1995–2000 growth of the internet, and if you bought 100 top Nasdaq companies in 1997 or 1998, 95 of them would be bankrupt. The AI thing will be similar; everybody is investing in it, and some businesses will thrive, and others will fall by the wayside.
“I think our industry will change quite dramatically over the next five years. We recently had some AI experts create a digital version of me so that it's virtually plugged into my brain and trying to ask me a million questions to see what I value and look for and analyse the market using my mindset,” says Peter.
“The possibilities and where it’s heading are amazing, but at the core of it, our business will remain about the relationship we have with people, providing a quality service, understanding their specific needs and getting the right solutions which are easily digestible.”
On a geopolitical and macroeconomic level, the world is changing. What advice does Peter have for CFOs riding this roller coaster?
“The world has changed dramatically quite a few times over the past five years. If you go through Covid-19, AI has suddenly come through, as have the investment valuations and two very unexpected wars. In that period, you’ve had a massive impact on inflation and very high interest rates, so a static approach isn’t going to work. You have to be dynamic in your approach and understand the market,” he explains.
“From a geopolitical point of view at the moment, Trump coming in his second term – he’s clearly done a lot of stewing and thinking and has come out with a range of rapid-fire actions which have surprised even the most ardent Trump fans. And I think from a South African point of view, we’ve always been the jolly kid who waves at the rest of the world; we’re now being treated like an adult,” he says.
“South Africa has in many ways aligned itself with the BRICs block, which is at odds with the West in many ways. So, Trump tends to put countries into two boxes, black or white, and we’re falling into the out-of-favour category. So, CFOs have to work out what you’ve got exposure to in your business, and it boils down to looking through the sensitivities in your business and understanding whether you have any sensitivities to what’s happening out there.”
Peter adds that Anchor Capital is mindful of IFRS and the recent buzz around it. “Our culture and us as human beings, I think we avoid businesses that we thought did harm or were running unethical practices. That is more in your DNA than any accounting standard. I think we have a fair amount of scepticism about the buzzwords that get thrown out there. We’d like to think we have more of an authentic approach to it.”
For Peter, Anchor Capital’s journey has been interesting. “We started a business with zero 12 years ago, and for the first four, five years of your life, you’re building up, and you’re hustling, and you’re trying to find a client and convince people to trust you, you’re winning money from your competitors, and they call you a ‘bucket shop’ and ‘no right to exist’ and you grow your business and then you get to a stage after five years where you’ve got the credibility now, but you’re still very nimble and the question marks of whether you’re a sustainable business are gone, you’ve won some awards, and it’s kind of a sweet spot.”
“And you carry on growing, and then a year later, you’ve got to another level of assets, and people start saying, ‘Oh no, no, you’re too big for me now; I was actually looking for a boutique service.’ In our 12 years of history, we were too small for five years, perfect for a year, and then you’re too big for six years. The reality is that the quality of the people you’ve got in the business overcomes being too small or too big. It’s about how that person interacts, engages, takes you seriously,” he adds.
“I always say to the guys in our business, if you can get a cup of coffee with a CFO, there’s always a place we can add value in their lives, and that’s how we’ve grown our business. Not by TV ads and billboards and shouting from the rooftops. It’s about living in the real world and helping people solve problems.”
