Sanlam and Absa said all suspensive conditions have been met in their agreement to combine their local investment management businesses, paving the way for one of SA’s largest black-owned asset managers.
The deal, first announced in October 2021, will create a black-owned investment manager with more than R1-trillion in assets under management (AUM), and comes as the financial services sector is under pressure from regulators for being slow to transform.
The transaction, which became effective on Thursday, sees Absa exchange its investment management business, Absa Investments, for a stake in Sanlam Investment Holdings Proprietary Ltd (SIH). Absa Investments comprises Absa Asset Management, Absa Alternative Asset Management, Absa Fund Managers and Absa Multi-Management.
The conclusion of the transaction provides greater scale and broader distribution to SIH as well as more investment products. Absa has also signed a 10-year distribution agreement with SIH that will enable the expanded operations to use the distribution networks of both Sanlam and Absa to sell their investment products.
“Scale is critical in driving the product and service innovation required to meet clients’ financial goals,” said Carl Roothman, Sanlam Investment Group CEO.
“Combined capabilities, expertise and commitment to our clients will position us to be the preferred investment solutions provider in SA. Our promise is to serve our customers with pride and deliver world-class client experience and solutions.”
Absa group financial director Jason Quinn said the bank remains committed to the investment management sector via its shareholding in the combined entity and the 10-year distribution agreement.
“[The deal] will help us to offer an enhanced customer value proposition by creating a deeper, broader range of investment solutions for our clients,” he said.
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