Sanlam buys majority stake in PineBridge

PineBridge Investments Chief Executive Officer Jonathan Stichbury. [PHOTO:JAMES WANZALA/STANDARD]

South African financial services group Sanlam is set to buy a majority stake in PineBridge Investments East Africa Limited (PIEAL).

The deal, which is waiting for regulatory approval by capital markets and retirement benefits authorities in Kenya, will see PineBridge rebranded to become Sanlam Investments East Africa Limited (SIEAL). PineBridge has operations in Kenya and Uganda.

The transaction, whose value is still unknown, will see the South African financial provider integrate its asset management businesses in the region. “The existing Sanlam businesses in East Africa will be able to leverage SIEAL’s capabilities. As the business develops, it will provide opportunities to expand geographically and develop other investment products,” said Sanlam Emerging Markets Chief Executive Officer Junior Ngulube.

The South African firm owns a 68 per cent stake in Sanlam Kenya. “We looked for a partner in Africa who could best continue to work with our clients on the continent and we are pleased to have been able to complete this transaction with Sanlam. At the forefront of our negotiations was the need to secure a buyer with a strong local heritage in order to maximise future business growth and honour fiduciary, client, and employee agreements,” said Anthony King, Regional CEO, EMEA at PineBridge Investments.

The Sanlam Group is listed on both the Johannesburg and Namibian stock exchanges and boasts of a market capitalisation of $11 billion (Sh1.1 trillion) as of March 2017. It has operations in 34 African countries.

Sanlam Kenya, formerly Pan Africa Insurance Holdings, has had a bumpy ride, issuing profit warnings for three years in a row. However, recently the firm withdrew an earlier profit warning notice issued in December. The company, in regulatory filings and a public notice dated February 9, 2017, withdrew the profit warning notice it issued on December 29, 2016 due to a reduction in the level of actuarial reserving for its life insurance businesses.

Create value

According to a 2014 survey by Alexander Forbes Consulting Actuaries Schemes, PineBridge Investments East Africa Ltd was ranked as one of the wealthiest fund managers in Kenya with assets under its management estimated to be worth Sh158.9 billion.

Mr Jonathan Stichbury, chief executive officer of PIEAL adds: “Becoming part of the Sanlam Group offers our clients and staff new opportunities. We look forward to working with Sanlam to create value for our clients and continue building the East African business.”