| Wed 23 Jul 2003, 9:03 | | Old Mutual entity seeks a partner ahead of charter |
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Old Mutual entity seeks a partner ahead of charter
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But executive director tight-lipped on details
Financial Services Correspondent
WITH the finance sector empowerment charter imminent, SA's largest asset manager, Old Mutual Asset Management (OMAM), said it wanted to sell part of its business to empowerment investors.
The charter is expected by the end of September and is set to have a profound impact on SA's asset managers.
With one eye on the charter process and the other focused on ensnaring a greater chunk of government business, SA's asset managers are wooing prospective empowerment partners.
OMAM is owned by life assurance giant Old Mutual and is the largest private sector asset manager with R250bn in funds under management at the end of December.
Its competitor, Sanlam, has also made noises over the last few months about selling part of its asset manager, Sanlam Investment Management (SIM) to black investors.
Sello Moloko, an OMAM executive director, was tight-lipped yesterday on any details of what empowerment options were being considered by his company.
"OMAM is part of the Old Mutual group and the group is looking at its various options of doing an empowerment deal, whether this be at a group level or at subsidiary level," he said.
Moloko's comments reaffirm those of Old Mutual deputy CE Peter de Beyer, who said two weeks ago that the group was considering empowerment deals at either group level or in the individual business units but there were no firm plans yet on the table.
SIM has assets of R220bn and any empowerment deal to take a stake in it or OMAM would be the largest direct deal in the asset management sector.
For SIM, the likely contender is Don Ncube's Real Africa Holdings, which already has asset management interests in Real Africa Asset Management in which SIM itself owns 37%.
A number of smaller competitors have already addressed the thorny issue of empowerment.
Investec Asset Management, with funds under management of R216bn, inherited empowerment credentials in May courtesy of the landmark deal which a consortium, including Tiso Group and Peu Investments, bought 25,1% of Investec's entire SA business including the money manager.
In June, Liberty and its parent Standard Bank sold 25% of their joint venture asset manager Stanlib to a consortium led by Safika Investments.
There have also been many others, including that in which Nedcor and its parent Old Mutual sold control of BoE Asset Management to a consortium led by Reuel Khoza's Aka Capital.
John Storey, CEO of listed multimanager MCubed, said it was not surprising that OMAM was considering an empowerment deal with the charter imminent.
"In the charter, affirmative procurement is expected to be more important even than a black ownership stake. So financial companies won't buy services from asset managers unless they have the suitable credentials," he said.
With government expected to outsource much of its R260bn in pension fund money currently administered by the Public Investment Commissioners to private sector asset managers, those seen as making the most effort to transform are likely to get the nod.
"There is a lot of government pension funds and union money hanging around to be managed. Everyone would want to be in the running for this," he said.
Jul 23 2003 07:43:40:000AM Rob Rose Business Day 1st Edition
Wednesday
23 July 2003
