Sanlam has appointed Ninety One as its primary active investment manager for single-managed assets, a move that will involve the transfer of some R400 billion of assets, while the global asset management firm will gain preferred access to Sanlam’s big distribution network, enhancing their positions in the South African market.
In recognition of the value transferred, Ninety One intends to issue shares to Sanlam, giving Sanlam about 12.3% of Ninety One’s share capital. Ninety One will remain an independent investment manager with staff as its largest shareholder.
Ninety One’s share price increased 3.35% to R38.41 in early trade on the JSE on Wednesday. Sanlam’s share price increased 1.44% to R89.53.
“We are looking forward to a long and fruitful relationship with Sanlam, a business with a powerful brand and significant scale in South Africa. Our experience and expertise are complementary. This agreement will give us the opportunity, as leaders in our respective markets, to create additional value for our stakeholders. We are making a substantial investment in the future of South Africa,” said Ninety One CEO Hendrik du Toit in a statement.
In terms of the deal announced this morning, Ninety One will take ownership of Sanlam’s active asset manager, Sanlam Investment Management (SIM). Sanlam will appoint Ninety One as the investment manager of Sanlam Investments UK, as part of which, Ninety One will take over third-party assets, balance sheet assets and the investment professionals who manage these assets.
A total pool of assets of about R400 billion (as of 30 September 2024) is expected to transfer to Ninety One. About 80% of the assets are managed in South Africa.
Sanlam will become an anchor investor in Ninety One’s private and specialist credit strategies that meet its investment requirements, a statement from Sanlam said.
The parties’ intention is to enter a relationship for at least 15 years, though they both believe this will be a relationship that will endure for the long term, the statement said.
“By leveraging our complementary competencies, Sanlam Investments will be strengthening its South African and global position as a multi-skilled asset manager. Coupled with Sanlam Investments’ market-leading expertise in passive and alternative asset classes, as well as multi-managed solutions, the relationship is set to unlock value for its clients, distribution force and shareholders,” said Sanlam CEO Paul Hanratty.
The deal will see Ninety One gain preferred access to South Africa’s largest network for the distribution of insurance, savings, and investment solutions. The agreement enables Ninety One to bolster its South African market leadership.
Meanwhile, Sanlam said the partnership aligns with its objectives and enhances its competitive positioning.
Sanlam Investments builds fit-for-purpose solutions for private, retail and institutional clients by utilising its specialist expertise and strategic partner networks across active, passive and alternative asset classes.
Active asset management is a core building block, and bolstering this capability will enhance its total offering across South African and offshore markets.
“Clients are set to benefit from a broader product suite, backed by Ninety One’s strong reputation and track record of providing competitive investment outcomes in South Africa and globally,” said Hanratty.
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