Sanlam puts 10% on side for empowerment
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Financial Services Correspondent
WITH its fortunes firmly back on an upward curve, life assurance giant Sanlam plans to announce a deal to sell 10% of its group equity to black shareholders within the next six months.
A financial services charter will be released today allowing companies to score points in various categories including black shareholding positioning firms with strong empowerment credentials to compete for state business.
A number of top financial services companies have signalled their intent to conclude empowerment deals but Sanlam may yet trump its rivals to the finishing line.
CEO Johan van Zyl said yesterday he hoped to announce the deal before March.
"We decided there is no point in doing an empowerment deal at Sanlam Investment Management or at a subsidiary level.
"We want to do it at the top level, (as) that is real empowerment."
The empowerment plans are part of a larger shake-up which Van Zyl instituted since he took the reins as CEO in March.
Once in the hot seat, Van Zyl announced tough streamlining measures including cutting excess jobs, decisively opting not to merge with Sanlam's 23%held investment Absa Bank, and organising Sanlam into four distinct clusters.
The market appears to have approved of Van Zyl's streamlining measures and, since April, Sanlam's share price has vaulted 30% from lows of 595c a share.
Yesterday, its share price gained 1% to 843c on the news that Van Zyl's strategy had advanced another step by consolidating Sanlam's offering to high networth clients in one vehicle, Innofin.
Although Sanlam previously held twothirds of the interest in Innofin, it said yesterday it would be buying the 33,3% held by Macquarie Bank of Australia for R90m.
While previously, all Sanlam's offerings to high net-worth clients were largely scattered around the group, Van Zyl said these would now be consolidated into Innofin through which high income clients could access any product they need.
"It is part of creating focus and getting things right. With a minority (in Macquarie) there, it was difficult to set the playing field and co-ordinate with our existing businesses. The idea was to position Innofin as the consolidated offering for high net-worth clients," he said.
Having grown from a start-up, Innofin has now turned the corner towards profitability and will be a key tenet , now that is fully owned by Sanlam.
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