Sanlam, Ninety One finalize $275.7-million asset management deal

Feyisayo Ajayi -
Key Points
  • Sanlam signs $275.7 million deal with Ninety One, making Ninety One the primary active investment manager for Sanlam's assets.
  • Ninety One to acquire 100% of Sanlam Investment Management, expanding its international footprint and gaining access to Sanlam’s network.
  • Sanlam receives 12.3% equity stake in Ninety One, with benefits expected after three years, boosting asset management capabilities.

Sanlam Limited, Africa’s leading insurer, partially owned by South African billionaire Patrice Motsepe, has signed a $275.7 million deal with Ninety One, an independent asset management firm, to fortify their positions in active asset management across African and global markets.

The agreement, valued at R5 billion ($275.7 million), makes Ninety One the primary active investment manager for Sanlam. As part of the deal, Ninety One will acquire 100 percent of Sanlam Investment Management (SIM), which will become its wholly owned subsidiary.

Additionally, Ninety One will oversee select assets under Sanlam Investments UK Limited, expanding its international footprint while gaining preferred access to Sanlam’s network.

Strategic equity swap

In exchange, Sanlam will receive a 12.3 percent equity stake in Ninety One, divided between Ninety One plc and Ninety One Limited, cementing its position as a long-term shareholder.

The deal, pending regulatory and shareholder approvals, is expected to boost Ninety One’s assets under management (AUM) by R400 billion ($22.1 billion).

“This partnership aligns with our mission to deliver innovative solutions,” said Sanlam CEO Paul Hanratty, noting the complementary strengths of the two firms in passive and alternative asset management.

Financial impacts and future growth

While the deal is projected to be slightly earnings-dilutive for Sanlam in the initial years, the benefits are expected to materialize by year three, driven by strategic synergies. In contrast, Ninety One anticipates immediate earnings and dividend accretion.

The collaboration seeks to leverage Ninety One’s integrated asset management expertise and Sanlam’s robust distribution channels to enhance efficiency and client outcomes. Sanlam will also boost its capabilities in private credit, a growing area of focus for the insurer.

Patrice Motsepe's continued influence

Patrice Motsepe, who holds a 7.8 percent stake in Sanlam through Ubuntu-Botho Investments, remains pivotal in shaping the company’s growth strategy as vice chairman.

His leadership continues to drive Sanlam’s efforts to consolidate its position in Africa’s burgeoning insurance and financial services sectors.

The deal underscores a broader trend of consolidation in the financial services industry, combining Sanlam’s African dominance with Ninety One’s global reach to meet evolving investor demands.