Alexander Forbes plans to double its retail business over the next five years by capitalizing on a new, slimmed-down structure and consulting expertise to add customers.
“The growth areas for us is to at least double our retail business in three to five years,” Chief Executive Officer Dawie de Villiers said in an interview in Johannesburg. The company’s retail consulting and advisory business is worth R90 billion.
The asset manager and fund administrator, backed by South African billionaire Patrice Motsepe, manages 435 billion rand and wants to overtake PSG Financial Services Ltd., which is the market leader in retail business consulting.
AlexForbes 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 and 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,” he said.
The pivot to growth follows the implementation of a turnaround strategy established after de Villiers joined the administrator from Sanlam Ltd. four years ago. AlexForbes has since sold its short-term insurance business to Momentum Metropolitan Holdings Ltd. 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, which is expected to boost client numbers by 40% and also bought an IT company EBS International.
According to de Villiers, the Sanlam deal will add as many as 400,000 new members to the firm.
AlexForbes also wants to increase its market share as a fund administrator by using EBS’s online platform to support self-run funds like the Eskom Pension and Provident Fund and Africa’s largest pension fund, the Government Employees Pension Fund, he said.
“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.