Sanlam’s black owner move will boost assets

The move by Sanlam to increase black ownership of its asset management business to 51% is a smart one. The unit may now find itself better accepted in asset management circles where tensions are high between the traditional players and black-owned companies, who receive less than 10% of SA’s trillions of rand in assets under management.

Sanlam CEO Ian Kirk says the change of ownership, which came as part of the new empowerment deal struck with Ubuntu-Botho (UB), will see Sanlam’s unit compete with black asset managers.

While black control will certainly open more doors for Sanlam in the retirement funds and employee benefit space, there is still a question of transformation at the management level.

Kirk says it’s a challenge the company is pushing ahead to win, but it’s a balancing act.

Temba Mvusi, Sanlam’s CEO for markets development, who must persuade trade unions and pension fund trustees to invest with Sanlam, says clients are demanding more black ownership, but sometimes want to see transformation beyond this.

“They want the guy who is actually handling the money they are allocating to Sanlam to be a black portfolio manager.” That said, traditional asset managers still have a role to play. Mvusi says that, after all, traditional asset management companies usually breed new black asset management firms, as black portfolio managers tend to leave established companies to start something of their own.

“That’s part of the revolution. It’s part of transformation. It’s not either/or. Transformation is not about traditional asset managers closing shop in favour of black asset managers. The cake is huge enough, over time, for real transformation to really take root in this industry and recognise that these are assets of mostly black employees.”

The profit centre for Cartrack Holdings, the vehicle recovery and fleet management specialists, still spins mainly in the SA market. But the company’s offshore forays are becoming much more meaningful and, in this regard, it may be worth paying particular attention to the US market tilt in the next five years.

Cartrack’s recent investment in the US has largely been in research and development — which is key to its successes in the telematics industry.

But some punters may be disappointed that the group has not found more operational traction in this key market. There is, however, some good news in the region as the company looks perfectly placed to capitalise on the “3G sunset” expected to transpire in 2020.

The vast majority of the competitors’ existing subscribers are still using 3G devices, which will soon become obsolete and need a replacement technology.

If Cartrack can lock into the new technological wave in the US telematics market, then its American operations might start off with a dash of speed.

Some observers might regard the competitive US market as a bridge too far, but one needs to remember the group has achieved remarkable success in key offshore markets. For instance, the Asia Pacific market has become the secondlargest market segment for Cartrack in a fairly short time.

Admittedly, the US market might be tougher, but success will no doubt bring Cartrack to the attention of the many techappreciative US investors.

Rival MiX Telematics is already a darling with certain US small-cap investors.