US-listed company buys Abax minority stake

AFFILIATED Managers Group (AMG), which is listed in New York, has bought a 25% stake in SA’s Abax, its first direct investment in an emerging marketbased money manager.

Although the price tag was not disclosed, it is understood it runs into tens of millions of dollars. The partnership gives Abax access to AMG’s global distribution network and expertise. Abax said yesterday that none of its shareholders would exit following the sale of a minority stake to AMG.

“They are buying a minority stake,” Abax CEO Anthony Sedgwick said.

“The business model for AMG is to take a percentage of revenue. AMG is taking an effective equity stake of about 25%.

“We as the existing shareholders … are getting a reasonable price.... It’s a large foreign direct investment into South Africa’s financial services industry and a huge vote of confidence in the country’s fund management industry.”

AMG is listed on the New York Stock Exchange and has a market capitalisation of about $10bn. AMG is also invested in 32 firms, which collectively manage assets in excess of $615bn.

In SA, an equivalent of AMG would be the new RMI Affiliated Managers, which is looking to acquire interests in a number of asset management businesses in the country. The investment in Abax was AMG’s first in an emerging market-based money manager, the companies said.

At the end of December last year, Abax had R75bn in assets under management. Abax was founded in 2003 and first started trading as Polaris Capital before changing its name in 2009.