Discovery’s Cogence launches South Africa’s first pooled private-market vehicle for retail investors

Discovery-owned discretionary manager Cogence has unveiled a new pooled vehicle that for the first time allows many South African retail investors to hold private-market assets alongside listed securities. The Diversified Markets Portfolio, launched via Discovery’s endowment platform, mixes public equities, bonds and cash with allocations to private equity, private credit, infrastructure and real estate through Cogence’s strategic association with BlackRock.

Cogence chief executive Jonel Matthee-Ferreira described the offering at a media roundtable in Cape Town, saying the portfolio combines public and private investments within a single structure. According to Cogence’s factsheet, the strategy is intended to deliver long-term capital growth while preserving income by blending global alternatives with domestic fixed income and equity exposure. The portfolio targets roughly 15% to private-market exposures, with the remainder invested in listed markets to sit within the group’s cautious, balanced and growth risk profiles.

BlackRock provides research and technology inputs to the construct. Liam Davis, BlackRock’s chief investment officer for multi-asset strategies, framed the move as a response to a shifting corporate landscape: “There’s a shrinking market in terms of publicly available listed companies. These companies are still important, but we need to recognise that other asset classes are emerging from private markets,” he said. Cogence presented data noting that the average age of companies at initial public offering has risen from about eight years in 2004 to around 14 years in 2024, underscoring that much growth now occurs before firms list.

The private-market sleeve spans four buckets: privately held companies, non-bank lending to businesses, physical infrastructure assets and real estate. Cogence highlighted illustrative exposures including hyperscale data centres in the United States, a European medical imaging business, battery material producers tied to electric vehicles and dental technology ventures. The manager also says the portfolio is stress-tested using BlackRock’s Investment Institute research and Aladdin risk platform.

Industry peers and product launches overseas reflect the same structural shift toward private allocations. According to a Cogence press release, the initiative follows a broader trend of wealth managers creating private-market vehicles for non‑institutional investors. Global firms have recently rolled out diversified private-credit and multi-sector private-market funds aimed at wealth clients, with PIMCO’s 2025 launch of an evergreen diversified private credit strategy cited as an example of rising supply in private lending strategies. Other large managers emphasise diversified private credit, infrastructure and real‑asset constructions to seek yield and downside protection, reinforcing Cogence’s rationale.

Cogence and Discovery acknowledge the trade‑offs that come with private exposures. Matthee‑Ferreira warned that regulatory and product design changes in Europe and the UK have shortened effective lock‑in periods in some structures, but illiquidity remains the primary drawback. “I think the first thing I need to say is private markets are not right for every client,” Davis added, noting investors cannot redeem private holdings with the immediacy of listed assets. Cogence has set an entry point of about R100 000 through Discovery endowments and stresses that allocation sizes should reflect individual liquidity needs.

From a South African asset‑allocation perspective, Cogence said it remains overweight domestic fixed income, citing attractive emerging‑market yields, a firmer rand and improving inflation targeting as supportive for local bonds. The manager expects ongoing volatility and geopolitical uncertainty through 2026 but argues that access to private markets can improve diversification when correlations between equities and bonds have at times increased, weakening traditional portfolio buffers.

The product’s arrival marks a clear shift in retail investment choice in South Africa: according to Cogence materials, blending private and public exposures is being positioned as a pragmatic response to a narrower public equity universe and growing value creation outside listed markets. However, advisers and investors will need to weigh potential return enhancement against limited liquidity, longer time horizons and reliance on manager selection and due diligence to realise private‑market outcomes.