Futuregrowth Stands by Loan Freeze to S. Africa State Firms
- Fund manager says it should have consulted before going public
- Funding freeze was criticized by government, ruling party
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Futuregrowth Asset Management, Africa’s biggest specialist fixed-income money manager, said while it stands by a decision to stop lending money to six of South Africa’s largest state companies, it should have consulted with them before going public with it.
The rand dipped and yields on state power utility Eskom Holdings SOC Ltd.’s bonds climbed after the asset manager, which oversees about 170 billion rand ($12.2 billion), announced the loan freeze on Aug. 31, citing concerns about governance. The government and the ruling party criticized the decision. Insurer Old Mutual Plc, which owns Cape Town-based Futuregrowth, said it wasn’t notified beforehand and that the move didn’t represent the position of the rest of the company.