Economic Empowerment: Editorials: Edition: April / June 2019

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Big and black

With adjustments in shareholding, Sanlam Investments is catching the wave for pension funds’ procurement choices.

In a stroke, a deal with African Rainbow Capital has shot Sanlam’s third-party asset manager to the top of B-B BEE rankings for assets under management. By virtue of its brand and base, Sanlam Investments (SI) moves to a pole position for the attraction of business from pension funds in terms of the Financial Sector Code.

At present, compliance with the code is voluntary but progress will be annually measured by the Financial Sector Transformation Council. A critical metric is that large retirement funds – which implicitly include umbrellas – compile and publish annual scorecards for preferential procurement. So an easy win is to appoint a black-owned asset manager.

The council warns that, if sufficient disclosure by pension funds does not materialise, “consideration will be given to revising this (voluntary) dispensation”. In measuring transformation progress, it says, there may be reliance on surveys in the public domain. The only such survey is BEE.conomics (TT Nov ’18-Jan ’19).

In terms of the survey’s black-owned definitions, ranking firms by size of assets under management the first is Taquanta (R146bn) followed by Aluwani (R57bn) and Mazi (R48bn). SI will eclipse them all, perhaps soon to have assets under management that will equate double the R410bn size of the top 10 put together. Don’t be surprised if at least one additional black-owned firm is soon merged for shares into the restructured SI. Read more…

“We’re contemplating one or two similar transactions,” says ARC joint chief executive Johan van Zyl. “The idea is to have a firm with R800bn of assets under management, which will be at least 60% black-owned, by the second half of this year.” Read more…

VAN ZYL