Leslie Ndawana on Driving Growth and Managing Risk in Institutional Investment

Leslie Ndawana is the Principal Executive Officer of the National Fund for Municipal Workers
in South Africa, where he is responsible for managing the Fund’s overall operations. In a
recent interview, Ndawana discussed his responsibilities as CEO of the Fund, his
contributions to its development and growth, his perspectives on risk management in
institutional investment, and his thoughts on the future of the industry.

As the PEO, Ndawana is responsible for setting and driving the organization’s strategy,
vision, and long-term objectives, as well as stakeholder engagement, communication with
the board of trustees, the regulator, and the members of the Fund. He also drives the
process to determine a sound investment strategy and determine the investment impact
areas and direction, which can contribute to the well-being of the Fund’s members as well as
on a broader social-economic level.

Ndawana has made significant contributions to the Fund’s growth and development,
identifying impact areas that could significantly contribute to the lives of its members and
their communities while addressing some of the biggest challenges and needs of society.
Investing in these areas became part and parcel of the investment strategy, which had to be
tailored around the Fund’s vision and now informs its approach to portfolio construction and
investing. The Fund invests and makes a meaningful contribution towards some of South
Africa’s most critical development areas, such as job creation, infrastructure, education,
technology (ICT), and healthcare. As part of its strategy, the Fund envisages this growth
substantially over the next couple of years to further enhance its unique vision.

In his session titled “CIOs of Institutional Investors – New Challenges, How to Know When to
Invest, Turning Difficulty into Growth, Managing Risk,” Ndawana discussed the key topics
that will be covered, highlighting the key points he will be discussing and the valuable
insights he plans to impart to the audience. The investment environment always evolves,
which means there are always new challenges to be addressed. It also means that new or
different opportunities are created along the way which needs constant assessment,
exploration and research. Ndawana emphasized the importance of understanding exactly
what you invest in, being satisfied with the investment and its purpose, and making sure it is
of high quality and good standing. These qualities must endure over a very long time and
speak to quality and underlying sustainability.

Ndawana also discussed the most significant challenges he has encountered in his role as
CIO of an institutional investor, emphasizing the need to be particularly careful to avoid the
“bad apples.” One bad investment decision could have a significant impact on Fund
members’ well-being and retirement prospects. Diversification remains key in the
decision-making process, together with managing concentration risk. Making the right
decisions ensures good outcomes, and is therefore part and parcel of the Fund’s success.
In terms of risk management in institutional investment, Ndawana believes that the risk of
not providing members with a sufficient pension at retirement is still the biggest risk for a
retirement fund. This captures all aspects of the Fund’s management on an operational level,
and therefore needs to be mitigated through excellent management and decision-making
skills on all levels.

Regarding the current investment environment, Ndawana believes that it remains uncertain
and challenging on many fronts, with uncertainty in so many areas/factors (be it financial,
economic, social, political, and environmental) which could ultimately have a significant
impact and influence on investment outcomes. He emphasized the importance of focusing
on getting the big decision right and sticking to one’s long-term asset allocation strategy.
Fortunately for the Fund, it is a long-term investor, which means that it is focused on
achieving its investment objectives over the longer term. This aligns with its members’
investment horizons and gives it the opportunity to focus on long term growth and
developmental assets, which will add significant value over the longer term.
Leslie’s quotes, “Economic development is at the intersection of funding initiatives by
institutional investors, innovation, entrepreneurship, leadership, and supportive regulatory