Absa to sell 51% of its asset manager

Absa will soon announce the sale of 51% of its asset manager to a BEE business. The identity of the buyer has been kept secret, but one option could be the Patrice Motsepe-owned African Rainbow Capital.

Names such as Mazi Capital, AMB Holdings, Aluwani and Sphere Holdings, have also all cropped up.

Not all the R319bn managed by Absa will be included, just the institutional business Absa Asset Management (Abam), which has R135bn under management. The R67bn money-market fund, which is essentially a banking product, will be managed by the bank.

The sale is not on the same scale as the split at Investec between its institutional asset manager and the rest of the group, but it is very much part of the same theme.

And it follows non-core disposals over the past two years, such as the sale of Absa Consultants & Actuaries to Sanlam, the sale of its short-term insurance brokerage to PSG, and the sale of its commercial intermediate short-term underwriter to Santam.

Abam, without the money-market fund, would be just outside the list of top-20 managers, below Abax and Prescient, as well as Taquanta, the largest BEE manager.

Absa spokesperson Songezo Zibi says the bank is in the process of building a “winning” wealth, investment management and insurance business that will be able to leverage off the strengths of the retail and business banking operations.

The new shareholders won’t be buying a cash cow. It made just a portion of the R170m for which the investment cluster was responsible in the six months to June. But under Ann Leepile, the group has had some strong performing funds. She says the Core Income and Bond funds were both doing well. ,

Once this deal is out of the way, Absa’s retail and business division will absorb the wealth investment, management and insurance division.