RMI to invest $70m in the country
RAND Merchant Insurance Holdings (RMI) , an investor in South African insurance companies, intends to allocate about $70 million (R993m) to enable a unit to buy stakes in independent money managers alongside plans for the division to build its own investment teams.
The resources for RMI Investment Managers would come from a R15 billion fundraising plan its parent disclosed last month, the unit’s chief executive, Chris Meyer, said on Tuesday.
The intention was to build businesses that could challenge the country’s largest overseers of investor funds, Meyer said.
“We’re taking minority equity stakes in existing boutiques to support them and grow them enough to take on the likes of Coronation and Allan Gray,” Meyer added.
Coronation Fund Managers has about R610bn in client assets, while Allan Gray has R458bn. Meyer’s unit, started about a year ago, has already bought stakes in Perpetua Investment Managers, Tantalum Capital, NorthStar Asset Management and Coreshares.
It hired Jonathan Myerson, Bronwyn Blood and Vaneshen Naidoo from Cadiz Asset Management to build a fixed income, credit and money market investment business.
Meyer wanted stakes in another two or three asset managers and to hire an equity and a multi-asset investment team for the unit, he added.
Preference shares
RMI hired Meyer in September 2014 after appointing Herman Bosman, the former head of Deutsche Bank in South Africa, as chief executive of the parent company in October 2013. Meyer previously headed the brokerage joint venture between Rand Merchant Bank and Morgan Stanley. RMI owns stakes in some of the country’s biggest insurers, including Discovery, MMI Holdings and OUTsurance Insurance.
Of the R15bn RMI is seeking through the sale of debt and preference shares, R5bn will be set aside for contingencies and opportunities, R1bn is for Meyer’s unit and R1bn will be invested in start-ups. – Bloomberg