THE BOTTOM LINE
Smart move by Sanlam to speed up transformation
‘Clients want the guy handling the money they are allocating to Sanlam to be a black portfolio manager’
The move by Sanlam to increase black ownership of its asset management business to 51% is a smart one. The unit may now find itself better accepted in asset management circles where tensions are high between the traditional players and black-owned companies, who receive less than 10% allocation of the country’s trillions of rand in assets under management.
Sanlam CEO Ian Kirk says the change of ownership, which came as part of the new empowerment deal struck with Ubuntu-Botho, will see Sanlam’s unit compete with black asset managers.
While black control will certainly open more doors for Sanlam in the retirement funds and employee benefit space, there is still a question of transformation at the management level. Kirk says it’s a challenge that the company is pushing ahead to win but it’s a balancing act.
Temba Mvusi, Sanlam’s CEO for markets development – the man tasked with persuading trade unions and pension fund trustees to invest with Sanlam – says clients are demanding more back ownership, but sometimes they want to see transformation beyond ownership.
“They want the guy who is actually handling the money they are allocating to Sanlam to be a black portfolio manager,” said Mvusi.
That said, traditional asset managers still have a role to play. Mvusi said that, after all, traditional asset management companies usually breed new black asset management firms as black portfolio managers tend to leave established companies to start something of their own.
“That’s part of the revolution. It’s part of transformation. It’s not either/or. Transformation is not about traditional asset managers closing shop in favour of black asset managers. The cake is huge enough, over time, for real transformation to really take root in this industry and recognise that these are assets of mostly black employees.”