It’s hard to believe that the Capital International Group (‘the Group’) is celebrating more than five years of operations in South Africa. The Group first established in Cape Town in January 2014 on the back of a small but growing seam of African new business.
Setting up a business on a distant continent was a big step for a relatively small independent Manx financial services business. Not only would it require successfully applying for new operating licenses from a new regulator (the Group’s South African subsidiaries are authorised by the Financial Sector Conduct Authority of South Africa), it also required considerable investment and a whole lot of hard work and resilience. Most importantly, the Group needed to shape its proposition appropriately for the local South African marketplace and build a quality distribution network. Having started with a handful of people in a small office in Tokai on the outskirts of Cape Town, the business has grown to almost 30 people based in smart new offices in the heart of trendy Newlands. It has also recently opened new offices in Johannesburg in the upmarket Bryanston district.
With significant volumes of the Group’s new business now being sourced through South Africa, the bold step taken five years ago has most definitely paid off. So, what has the journey entailed for the Group and how has it achieved its success?
An Open-Architecture Platform
One of the principal rationales for opening an office in South Africa was the realisation that there was a real opportunity for local innovation through the development and rollout of our open architecture trading and investment platform. When compared to most of the incumbent providers, who typically specialised in one area (such as funds or listed securities, or in limited geographies & currencies), we differentiated ourselves by creating a truly international ‘open architecture’ platform that provides a gateway for financial intermediaries and their clients to access a global universe of offshore investments, and where one can deal in listed assets, funds & collective investments and structured notes & products all on a single interface. Furthermore, the platform does not just provide access to our own products but importantly, it also provides access to our competitor’s products, making it truly ‘open architecture’ and somewhat unique in the African market. It is accessible online from anywhere in the world and financial intermediaries can keep up-to-date with their client’s investment activity and review their consolidated reporting at any time.
Offshore Really Means Offshore
As the business grew, we started to receive really positive feedback on our proposition. We also recognised the strength of having the Isle of Man as our administrative and custodial headquarters, whilst at the same time, we invested heavily in building up our client support and relationship management expertise locally in South Africa. We discovered that many of our competitors are either large South African brands who have limited international operations overseas, or large international brands, who have limited physical presence in the local South African market.
We enable our clients to hold all their data, their assets and intellectual property on the Isle of Man, which itself is a widely recognised and well regulated international financial services centre, whilst at the same time, we have a dedicated team of local professionals in South Africa and operating in the cloud, providing exceptional client support services, focusing on relationship management, onboarding and long term business development. Our financial intermediaries recognise this approach as a key differentiator because they know they are dealing with a truly offshore business whilst at the same time, they can have the comfort of on the ground support through a South African regulated business that has a strong locally based team that crucially understands the African marketplace, its challenges and its people.
Without an established brand presence, we knew that to succeed we had to offer the best possible service to our professional intermediaries and their clients. We pride ourselves on our clear and responsive service levels and we guide clients through a detailed understanding of the complexities of doing business internationally, whilst actively managing client expectations and response times.
The strength of our client service experience lies primarily in our people and in the culture of our business. We have worked hard to bring together a diverse team of professionals who understand the culture of our business, understand the local challenges and who have experience of dealing in international markets. We have worked hard to ensure that our Group values of Innovation, Integrity, and Excellence have been deeply embedded into our South African operations and that they are well recognised and valued by our professional intermediaries and their clients.
After three years of slowly building up our network of clients and professional intermediaries, in 2017 we completed the acquisition of a small South African financial services business. Not only did the business give us additional scale on the ground, it also gave us some important new fintech capabilities and software that enhanced our existing platform solution. Furthermore, we acquired a number of valuable new client relationships and some great new staff, and thus the acquisition enabled the business to grow rapidly on multiple fronts all at the same time.
The next step of our growth strategy commenced in January 2019 as the Group opened a second office in Johannesburg. This office is staffed with business development, relationship management and client support professionals and will enable us to better serve our very important Johannesburg network of financial intermediaries. It will also enable us to reach other important growth areas, including Pretoria, Durban, Mauritius and to look further out towards neighboring African countries.
The Group is now in its 24th year of operation and has prominent office facilities in the Isle of Man which reflects our culture and values. In line with this we have also recently undertaken a complete refurbishment and expansion of our Cape Town office to reflect the Group’s position and our plans for future growth in South Africa.
Over the last five years the Group has focused strategically on the steady expansion of our South African business and this, in turn, has resulted in substantial growth, not just in South Africa but also on the Isle of Man. With our plans to seek a new banking license on the Isle of Man progressing, there is much to be positive about for the future.
For South Africa, the plan is to continue to work closely with our financial intermediaries and to strengthen and build on these relationships. At the same time, we are also continuing to build up our local expertise in order to expand our reach across all of the major centers in South Africa and in time, we expect our Johannesburg office to enable greater access into other parts of Africa.
For intermediaries, clients and contacts who would like to come and visit us and experience this wonderful new office space, please do get in touch.