Sanlam selects Ninety One as primary active manager for single-managed assets

Sanlam is looking to strengthen its South African and offshore product offering by appointing Ninety One as its primary active investment manager for single-managed assets.

Ninety One, in turn, will gain preferred access to Sanlam’s vast distribution network, enhancing its position in the South African market.

Key points
Ninety One will take ownership of Sanlam’s active asset manager, Sanlam Investment Management (SIM). Furthermore, 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 relevant investment professionals who manage these assets in alignment with client requirements.

A total pool of assets of approximately ZAR400 billion (as of September 30, 2024) is expected to transfer to Ninety One. About 80% of the assets are managed in South Africa. Both Ninety One and Sanlam are committed to ensuring clients receive first-class portfolio management and service throughout the transition.

Sanlam will become an anchor investor in Ninety One’s private and specialist credit strategies that meet its investment requirements.

The parties’ intention is to enter a relationship for at least 15 years, though both Ninety One and Sanlam believe this will be a relationship that will endure for the long term.

Value
In recognition of the value transferred, Ninety One intends to issue shares to Sanlam, giving Sanlam an approximate stake of 12.3 percent of Ninety One’s share capital. Ninety One will remain an independent investment manager with staff as its largest shareholder.

Ninety One’s rationale
Ninety One has a successful history of partnerships with some of South Africa’s most respected financial institutions. With this agreement, Ninety One gains preferred access to South Africa’s largest network for the distribution of insurance, savings, and investments solutions. The agreement enables Ninety One to bolster its South African market leadership and reinforces its ability to deliver outcomes that benefit clients over the long term.

Sanlam’s rationale
Sanlam views this as a powerful partnership that 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.

Status and next steps
The Boards of Ninety One and Sanlam have reached agreement on the key principles and the process to finalise the transaction agreements, which will be subject to relevant shareholder and regulatory approvals.

Hendrik du Toit, Ninety One Founder and Chief Executive Officer, commented:

“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.”

Paul Hanratty, Sanlam Group Chief Executive Officer, commented:

“Sanlam is pleased to partner with a like-minded business with a shared South African heritage, proven global expertise and a reputable brand. 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.”