Alexforbes buys Outvest

Alexforbes has completed the acquisition of the OUTvest digital investments platform from OUTsurance as part of its plan to double its retail business over the next five years.

This follows an announcement from OUTsurance last year, informing shareholders that it had concluded an agreement with Alexforbes to sell OUTvest to the asset manager.

OUTsurance previously said the transaction falls below the threshold for categorisation in terms of the JSE’s listing requirements.

OUTsurance previously conducted a strategic review of OUTvest, after which it decided to consider restructuring OUTvest due to the sub-scale nature of this business.

OUTvest is a digital investments platform launched in 2017 that connects people to financial advice and a range of investments to help them achieve their financial goals.

“We believe OUTvest fits neatly into our strategy by helping customers set goals, select investments and track their progress over time,” said Alexforbes retail executive Viresh Maharaj. 

Alexforbes previously said it plans to double its retail business over the next five years by capitalising on a new, slimmed-down structure and consulting expertise. 

“The growth areas for us is at least to double our retail business in three to five years,” CEO Dawie de Villiers told Bloomberg. 

The asset manager and fund administrator, backed by South African billionaire Patrice Motsepe, wants to take advantage of legislative changes that now allow pension fund administrators to communicate and advise members directly. 

Previously, they remained in the back office with access limited to human resource departments, not members.

“That is the massive opportunity,” De Villiers said, adding that the changes could bolster growth in its retail base. 

“We have solutions that our clients have invested in throughout their savings life, and now they can continue in those solutions with us post-retirement.”

The pivot to growth follows the implementation of a turnaround strategy established after De Villiers joined the administrator from Sanlam. 

Alexforbes has since sold its short-term insurance business to Momentum Metropolitan and disposed of its life insurance unit to refocus on consulting and advisory.

The company used those proceeds to acquire Sanlam’s retirement fund administration business for R154 million in 2021, expected to boost client numbers by 40%. 

According to de Villiers, the Sanlam deal will add as many as 400,000 new members to the firm.

“The strategy around acquisitions is to build scale on administration — the more members you have under administration, the more overheads it covers and the more scale and synergy benefits you get,” De Villiers said.