Reaching for the Sky - Allan Gray of Allan Gray Limited

by Sally Hetherington

How one man's dream started one of the most successful investment companies in South Africa.

Born in East London, South Africa, Dr. Allan W.B. Gray completed his articles at age 22, after which he went to Harvard, USA, to complete his MBA in 1963.

In 1965 Allan joined Boston-based Fidelity Management and Research Company Limited, working alongside Peter Lynch and Gerry Tsai, now well known in US investment circles. In the last four years of his career at Fidelity, Allan held the position of Portfolio Manager of the Capital Fund, which was valued at over US$500 million at the time.

He left Fidelity in 1973 to move to Cape Town to pursue his dream of having his own
Allan Gray
investment management company. This was at a time when people believed that share prices moved in a random way, and the future of the market could therefore not be predicted, making it impossible to consistently outperform the market. Allan, however, took a different view, and was confident that he could establish and structure a company that could deliver top-quality total rates of return over the long term, and so Allan Gray Investment Counsel was born.

In 1988 Allan relocated once again to open a global investment advisory firm in London, with the help of his son, William. By this time Allan Gray Investment Counsel had six partners, 36 staff members and R2.4 billion under management. Always ready for a new challenge, Allan then went across to Bermuda in 1989, to start Orbis Investment Management Limited, the first three Orbis mutual funds being launched on 1 January 1990. William joined Allan in Bermuda in 1993, and is now president of the Orbis Group in Bermuda.

Orbis has since grown from US$67 million under management at the beginning of 1990 to having about US$1.4 billion in its equity portfolios in the third quarter of 2001. According to Standard & Poor's Fund Surveys, Orbis Group Equity ranks number one over the past ten years of all offshore global equity funds, with a compound annual return of 17.3% over the period - a figure more than double the average global fund's performance.

Meanwhile Allan Gray Investment Counsel in South Africa (now Allan Gray Limited) evolved from a partnership to a group of companies, operating locally and in Namibia, offering segregated portfolio management, long term insurance investment policies and a suite of unit trusts.

Allan Gray Limited in South Africa is now considered to be the biggest privately owned retirement fund asset manager in South Africa, with in excess of R30 billion assets under management, with investment returns consistently outperforming peer groups in each of the past three, five, ten and fifteen year time periods. Allan Gray Limited's equity portfolios have also outperformed the Johannesburg Stock Exchange All-Share index by a compounded average margin of about 11% a year, beating the index in 21 of the past 27 years.

And it all began with the dream of one man.

Click here to visit the Allan Gray website

Back to www.bizland.co.za