Pulse Check: Reflections on a world in transition

DEMOCRACY STRESS TEST

The dust has barely settled on one of the most consequential election years in modern history and already its ripple effects are shaping economies, markets and public sentiment worldwide. 

With over 70 elections held across the globe, 2024 proved to be a significant stress test of the resilience of democratic systems. Every governing party in a developed nation lost material vote share – a historical first.

But these elections were about more than just politics; they reflected deeper concerns about governance, stability, and the widening chasm between the real-life challenges people face daily and what policies their governments instead chose to focus on primarily.

The cost-of-living crisis was therefore a critical factor in shaping the outcomes of these elections. Across the Western world, citizens are grappling with economic pressures that headline inflation numbers often fail to fully capture. And as such, people are fed up – fed up with regulations and policies imposed over the last decade that, while perhaps noble in intention, have made life harder and prohibitively costly for the average citizen.

THE CULTURAL “VIBE SHIFT”

We’ve also witnessed a cultural “vibe shift” – a palpable pushback against extreme ideologies that have dominated discourse for years. The radical fringes of movements, once heralded as progressive, are now being met with resistance from the very people they aimed to champion. The conflation of causes like transgender rights with civil rights movements, while important in many respects, has alienated many who feel the conversation has gone too far, too fast.

And let’s not forget the bloated civil service problems in the Western world, or the UK’s “butler economy”, where the service sector advances while the wealth is created elsewhere. These issues have become symbolic of a broader frustration with inefficiency, overregulation, and declining national value propositions.

THE TRUMP EFFECT

Much of the world’s focus is understandably on the recent US election. The Republicans – led by Donald Trump – secured a significant victory, riding on a mandate for change. Trump’s emphasis on a colourblind, merit-based system has struck a chord with many, signaling a real shift in identity politics. His message of a “common sense revolution” was re-iterated strongly in his speech at Davos in January, influencing the tone other nations feel increasingly pressured to adopt.

Of course, this vibe shift isn’t without turbulence. The removal of censorship on social media platforms is a win for free speech, but it’s also opened the floodgates for AI bots to spread incendiary content and misinformation, often for profit purposes. Managing this mess will be a challenge, but one worth tackling.

Against this backdrop, AI is the most disruptive technology of our time, transforming industries at an unprecedented pace. But here’s the kicker: it demands enormous energy resources. The astronomical cost of energy in many regions, like the UK, resulting from exuberant net-zero policies, threatens the competitiveness in AI development and adoption. The debate over “virtue signaling” versus pragmatic policymaking is only heating up.

CHANGE FOR SOUTH AFRICA

Closer to home, South Africa saw its own seismic shift. We use the term so freely today that it’s impossible to think that a year ago, most of us would never have bet the house on the “GNU”. The Government of National Unity represents a historic turning point in SA politics and definitely the “high road” of available scenarios. Now, let’s not forget this is an arranged marriage between two major parties who were sworn enemies for the better part of three decades. So, realistically, one must expect things to be messy and bumpy, but I am sure you will all join me in hoping that the common goal of wanting to do what’s best for our country (and the parties involved may all have differing views on what that is) is hopefully strong enough to keep things together. 

Needless to say, markets have liked the election outcome and rallied. Optimism in the country has surged.  The honeymoon period was in fact so good, that it seemed to even lift the dreaded semi-final curse for the Proteas – although, sadly, they were in the end unable to clinch the trophy at the T20 World Cup. Maybe next time.

From an industry perspective, we saw the implementation of the two-pot system and the outflows that ensued, which far exceeded initial expectations. We expect the pace of outflows to slow materially this year and into the next, with the benefits of preservation hopefully starting to yield good outcomes for members in the years to come.

CORONATION REMAINS FOCUSED

And amidst all the challenges, the Coronation team has remained focused on the task at hand. I am pleased to report strong performances across both our multi-asset and specialist asset class mandates – which, when taken over the decades since inception, show staggering market-beating returns that have been produced for our clients.

We have also had a busy year as a business.

• We launched a few new products – both local and global, and have won numerous investment awards and three culture awards – the 2024 Gender Mainstreaming Women on Boards; the 2024 Irish Pensions Diversity Award and the 2024 100 Women in Finance EMEA Award.
• We were also relieved to finally put the long-running tax dispute with SARS behind us, with the Constitutional Court ruling decisively in our favour.
• And of course, we ended the year on a high note, with the announcement of an exciting BEE transaction, making us majority black-owned and the largest independent black asset manager in the country.

As always, none of these would have been possible without the ongoing loyalty and support of our clients, and I really do want to take this moment and opportunity to just emphasise how truly grateful we are for you and to assure you that we remain focused on achieving the best possible outcomes for your funds.

EMBRACING OPPORTUNITY AMID CHAOS

As we stand here today, the world reflects uncertainty, frustration, and deep societal shifts. But it also reflects resilience, innovation, and humanity’s incredible capacity to adapt and survive.

The world has faced calamity before – cultural, political, economic. This period of transition is going to be messy, yes. But history has shown us time and time again that out of messiness, comes opportunity. And we at Coronation remain committed to navigate these turbulent times, armed with data, analysis, and yes, also a bit of common sense.

*This article is an edited version of a message delivered by Kirshni Totaram at TI with Coronation 2025.

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