Goldman zeroes in on millennial spending with South African fund

Goldman Sachs Asset Management and a unit of South Africa’s Discovery Ltd have tailored an investment offering to profit from trends such as the spending habits of millennials and advances in health care.

Discovery’s Global Megatrends Fund allows clients in South Africa to allocate investments equally across four of Goldman’s equity portfolios linked to the themes of technology, health care, environmental sustainability and a younger generation of consumers.

Customers will have access to the global artificial intelligence market, expected to grow to $190 billion by 2025, and companies catering to the world’s 2.3 billion millennials, according to a statement on Monday.

“We are not interested in short-term fads that might last two or three years,” Richard Wiseman, client portfolio manager of the equity team for Goldman Sachs Asset Management, told reporters in a virtual briefing.

“We want to be invested in trends that we think will last decades in their impact and make substantial change to the future of industry, society and the world in general,” he said.

The fund caters to South African clients with a higher risk appetite and also seeking access to markets and sectors unavailable at home. Most of its asset base is located in North America while spanning other regions including Europe and Asia.

Discovery Invest, a unit of South Africa’s largest health-care administrator, launched an investment offering advised by BlackRock and Goldman Sachs about a year ago.

The firm, started in 2007, has about R114 billion ($8 billion) in assets under management, according to Discovery Invest chief executive officer Kenny Rabson.

Portfolio diversification is at the heart of the fund’s appeal for local clients, according to Discovery and Goldman, since South African stocks represent less than 1% of the global equity market.

“In this fund you have the full force of these megatrends but you have diversified the risk by owning all four of them,” Wiseman said. “It’s about ultimately being on the right side of long-term, secular growth.”

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