Allan Gray hands his assets to philanthropy
Allan Gray has given his family’s controlling stake in the fund manager bearing his name and its offshore partner, the Bermuda-based Orbis Group, to a charitable foundation in an unprecedented move for a South African investment company.
Control of the business had been transferred to the Allan and Gill Gray Foundation and dividends would be used for philanthropic purposes, said Gray in a newsletter to clients dated December 31 2015, without giving details of the size of the transaction.
Patrice Motsepe, chairperson of African Rainbow Minerals and the richest black South African, pledged some of his wealth to charity in 2013, joining initiatives by Warren Buffett and Bill Gates to boost philanthropy.
“If we are able to continue to do a good job for clients and retain their trust and confidence, I would expect those dividends to be measured in hundreds of millions of rands rather than tens of millions of rands,” said Ian Liddle, chairperson and chief investment officer at Allan Gray, by phone from Cape Town.
Gray “wants our businesses to continue to thrive and he thinks this is a governance structure that will allow our businesses to continue to thrive”, said Liddle.
Allan Gray oversees about $29 billion (R469 billion) and has an empowerment company, a staff share trust and some executives as minority shareholders, according to Liddle, who did not disclose the value of the company. Orbis managed about $20 billion for clients, he said. The company was South Africa’s fourth-largest money manager in 2014, according to a survey of retirement funds by Alexander Forbes.
Gray, who turns 78 in April, said in the newsletter he had stepped down as chairperson of Orbis to focus on the foundation.
A Harvard Business School graduate, he founded Allan Gray Investment Counsel in Cape Town in 1973 and served as chief executive for 15 years before starting Orbis in 1989. He now lives in Bermuda. The foundation’s mission statement “is to ensure that the fruits from its controlling interests in Orbis and Allan Gray are ultimately devoted entirely and exclusively to philanthropy, in keeping with the family’s long-held intentions”, said Gray.
“We consider this both the right thing to do and a small but necessary contribution towards a society full of hope for all humanity.”