Africa Rainbow Capital, the investment company owned by billionaire Patrice Motsepe (pictured), bid R815 million ($47.5 million) for a 25% stake in Sanlam Investment.
Patrice Motsepe says he believes this latest transaction will enhance Sanlam’s operations to make it a serious player in the highly competitive asset management industry. Sanlam for its part said, “this is particularly relevant in the current challenging operating environment, which is likely to persist in the near term as the country recovers from the severe impact of the Covid-19 pandemic.”
The operation strengthens the presence of the exclusively black-owned capital in the chain of activities of the leading insurer in Africa. Indeed, Ubuntu-Botho Investments, which is the parent company of Africa Rainbow Capital is already a 14.13% shareholder of Sanlam. The ultimate goal is to implement one of the most effective instruments of Black Economic Empowerment, which requires South African companies to reserve a share of their shareholding for blacks.
The first four months of 2020 have been very difficult for Sanlam Investment Group. Although the investment company performed well in its asset management business, with rising commissions and increased savings inflows from its investors, SanFin, its money market investment arm, did not post good results. The branch had to face rate cuts and increase its provisions for credit risks.