Ninety One and Sanlam join forces 

Two of South Africa’s largest asset managers, Ninety One and Sanlam, have entered into a binding framework agreement to create a 15-year partnership between the companies. 

Under the agreement, Sanlam will appoint Ninety One as its primary active investment manager for its local and global products. 

As part of this, Ninety One will buy Sanlam’s active investment management business, Sanlam Investment Management Proprietary. Sanlam will also appoint Ninety One as the investment manager for its UK business. 

These two businesses have a combined R400 billion in assets under management, which will be moved to Ninety One. 

In exchange, Sanlam will receive a 12.3% equity stake in Ninety One through a combination of Ninety One Limited and Ninety One plc shares. In effect, Sanlam will become one of the largest shareholders in Ninety One. 

The companies said in a joint statement that the proposed transaction is expected to be slightly earnings and dividend dilutive for Sanlam in the initial years.

Only from the third year onwards will the partnership’s strategic benefits begin to materialise for the insurer. 

On the other hand, the transaction is expected to immediately benefit Ninety One as it will gain R400 billion in assets under management. 

First established as Investec Asset Management in 1991, Ninety One has become the largest asset manager in South Africa. 

It has also built a significant business in the UK, leveraging its relationships with South African financial institutions to manage their offshore investments. 

The transaction with Sanlam is part of strengthening these relationships, the company said in a statement. 

Ninety One also said the preferred access it will gain to Sanlam’s distribution network would expand its reach to savings and investors outside of the reach of its own brand. 

Furthermore, the establishment of Sanlam as an anchor investor will enable Ninety One to expand its international private credit operations. 

“We are looking forward to a long and fruitful relationship with Sanlam, a business with a powerful brand and significant scale in South Africa,” Ninety One CEO Hendrik du Toit said. 

“Our experience and expertise are complementary. We are making a substantial investment in the future of South Africa.”

On the other hand, Sanlam said its asset management capability will be strengthened by this agreement and drive better outcomes for its clients. 

A key factor in Sanlam choosing Ninety One for this partnership is its global presence, enabling it to meet the growing demand from clients for international exposure. 

Sanlam said it would also look to couple this expertise with its market-leading position in passive investments through Satrix and alternative asset classes. 

“By leveraging our complementary competencies, Sanlam Investments will be strengthening its South African and global position as a multi-skilled asset manager,” Sanlam CEO Paul Hanratty said. 

The value of the net assets that are the subject of the Proposed Transaction and the profits attributable thereto will be finalised as part of the Operative Agreements referred to above. 

A further announcement will be released by to shareholders at an appropriate time once finalised, the statement said. 

The longstop date for the finalisation and execution of the Operative Agreements is 31 March 2025.