Two South African giants team up

Ninety One and Sanlam have given further details on their proposed partnership, where Ninety One would become Sanlam’s primary active asset manager.

Ninety One is South Africa’s largest asset manager by assets under management, while Sanlam is the nation’s largest insurer.

In November 2024, Sanlam and Ninety One announced that they had entered into a binding Framework Agreement (FWA) to establish a long-term strategic relationship.

This would see Ninety One named as the primary active asset manager for single-managed local and global products, with preferred access to Sanlam’s South African distribution network.

The FWA envisaged that the transaction would be implemented pursuant to several operative agreements, such as a relationship agreement, which would govern the 15-year strategic relationship.

It would also set out the terms for the appointment of Ninety One as the primary asset manager for assets held on the balance sheet by Sanlam Life and Sanlam Developing Markets Limited.

As per the transaction, the Sanlam Group will receive a total of about 125 million shares, combining the shares of both Ninety One plc and Ninety One Limited.

The allocation represents roughly 12.3% equity stake in Ninety One on a dual-listed company basis, based on Ninety One’s total issued share capital.

The distribution of these shares among the Sanlam Group entities is as follows:

Excluding ARC Financial Services Investments Proprietary Limited as an indirect minority shareholder in SIH and Absa Financial Services Limited as a direct minority shareholder in SIH, the Sanlam Group will hold an effective shareholding of about 8.9% in Ninety One.

The companies warned that the South African and UK transactions are not inter-conditional, with each transaction subject to various suspensive conditions, such as regulatory approvals.

The UK transaction is not subject to Ninety One shareholder approval, and the issuance of Ninety One shares will take place using Ninety One’s existing allotment authority.

The South African transaction has a long stop date of 31 March 2026, while the UK transaction’s long stop date is 15 August 2025. The effective dates are dependent on the fulfillment of the various suspensive conditions.

Sanlam doing well

The partnership comes amidst a strong performance for Sanlam, with it releasing its finanical results for 2024.

The group achieved a net result from financial services (NRFFS) of R14.1 billion (R15.4 billion, when including a once-off reinsurance recapture fee), up by 14% from 2023.

The group said that NRFFS benefited from strong organic growth, with robust contributions from life insurance, general insurance and investment management.

NRFFS per share jumped by 16% (27%, including the reinsurance recapture fee) due to a lower adjusted weighted average number of shares in 2024 relative to 2023.

Net operational earnings of R17.2 billion (R18,5 billion, including the reinsurance recapture fee) marked an increase of 24%

This benefitted from higher investment returns on the shareholder capital portfolio, coupled with reduced corporate project expenses.

Net operational earnings per share jumped by 26% (up by 36%, including the one-off reinsurance recapture fee).

Headline earnings per share jumped by 37%, with higher growth relative to net operational earnings resulting from reduced external financing costs in 2024 related to a B-BBEE special purpose vehicle.

The group also declared a final gross cash dividend of 445 cents per share for the year, an increase of 11% on the prior year’s dividend.