Independent SA wealth and asset manager Anchor Capital has partnered with UK peer group Credo in a deal that enables Anchor to spread its wings beyond SA, where it has accumulated R120bn in assets under management over the past decade.
Anchor shareholders will own 80% of the UK independent wealth manager in a R2.5bn transaction that will broaden the asset base of the merged entity to R230bn. Credo caters to more than 7,000 ultra-high-net-worth clients with assets under management of £4.6bn (R104bn at the present exchange rate).
The partnership will see the companies unite under a common shareholding structure, allowing co-operation of senior management while preserving each firm’s day-to-day operational independence.
There will be no change in the way the firms manage their investment solutions. Anchor’s investment team will continue to provide a growth-based set of funds and portfolios, while Credo’s will independently continue with its value-orientated investment strategies.
“We think we’ve grown sufficiently in SA. Our next logical step as we globalise the business is in Europe,” Anchor Capital CEO and founder Peter Armitage said on Thursday.
“Our businesses share a similar culture and ethos in looking after our clients.”
Armitage has been in charge of the business since its humble beginnings in 2012 when it had just R1bn in assets under management. It now caters to more than 15,000 clients, which include pension funds and ultra-high-net-worth clients.
Armitage has said before that he is targeting R500bn in assets under management.
Anchor’s exponential growth came despite the economy stuttering for a decade, adversely affecting savings pools.
“Our core proposition has always been to offer outstanding financial solutions to our clients, and by partnering with Anchor we are able to provide our clients with access to a broader range of investment solutions and additional scale on our wealth platform that is key to operating in multiple jurisdictions,” Credo CEO Charles van der Merwe said in a statement.
Van der Merwe previously worked at Standard Bank and studied at Stellenbosch University and the University of Johannesburg. He joined Credo in May 2013, according to his LinkedIn profile.
The merger, which is subject to regulatory approval from both SA and the UK, comes at a time when asset managers are trying to stem outflows given the volatile global markets, in particular equities, while the SA economy is still punching below its potential.
In August, Rand Merchant Bank (RMB) painted a less rosy picture of the outlook for the SA asset management industry, citing weak economic growth, policy uncertainty and poor sentiment in SA-focused stocks.
Shrinking
RMB sector head for asset management and funds Isabella Mnisi said at the time that the number of SA asset managers is expected to shrink 3% over the next five years.
Companies with assets under management of less than R10bn are at risk of becoming economically unviable in a tough trading environment, Mnisi said.
The CEOs of other big asset managers have previously expressed concern about shrinking savings pools in the country. These include Stanlib’s Derrick Msibi and Ninety One’s Hendrik du Toit.
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