Sanlam and Absa join forces to create one of SA’s largest asset managers

JOHANNESBURG - Sanlam and Absa have joined forces to create one of the largest asset management businesses in South Africa.

The two financial giants said they have agreed to combine their investment management businesses and create a company with assets under management, administration and advice in excess of R1 trillion.

The companies said Absa will exchange its investment management business, Absa Investments, for a stake of up to 17.5 percent in the asset management company that Sanlam created with Patrice Motsepe’s African Rainbow Capital (ARC) called Sanlam Investment Holdings Proprietary Limited (SIH).

SIH is a third-party asset management business in which ARC Financial Services holds a 25 percent stake. Sanlam owns the remaining 75 percent.

The transaction has been rumoured for a while, but the companies kept tightlipped about it for months.

Absa Investments comprises Absa Asset Management, Absa Alternative Asset Management, Absa Fund Managers (excluding the Absa Prudential Money Market Fund) and Absa Multi Management.

As part of the transaction, Sanlam-owned Satrix, which is now a subsidiary of SIH, will acquire the exchange traded funds (ETF) business of Absa’s NewFunds (excluding its commodity ETF business).

The intention is that Absa will enter into agreements to dispose of its market Linked Investment Services Provider (LISP) business to Glacier by Sanlam.

Absa will also enter into a 10-year distribution agreement with SIH, meaning that the two companies will use sales channels of both Sanlam and Absa. – FIN24.