Absa meets with ARC Investments of Sanlam and Patrice Motsepe for the sale of its asset management unit

The Absa Group is in talks to sell some or all of its asset management business to Africa’s largest insurer, a deal that could create a company with more than R900 billion in assets, people say. close to the file.

South Africa’s third-largest lender is in talks with Sanlam and its partner African Rainbow Capital Investments over a deal, said the people, who have asked not to be named because the talks are private. No decision has been made and a deal cannot be reached, they said.

A combination of the Absa business with the equivalent owned by Sanlam would become one of the largest fund managers in the country, behind the Public Investment Corporation. Parties to the negotiations envision further growth as the sector is otherwise populated by a number of small players, the people said.

Absa and Sanlam declined to comment. ARC, the investment vehicle of South African billionaire Patrice Motsepe, said he could not comment on discussions with potential new partners.

The talks come after Absa announced the decision to unwind its $ 6 billion money market mutual fund, citing risks to the bank due to clients’ belief that its investments maintain the same level of security as the banks. cash in a savings account. The move fueled speculation that Absa may really be looking for a buyer.

Absa is currently led by interim CEO Jason Quinn following the departure of former director Daniel Mminele following a disagreement over strategy last month.

African Rainbow Capital acquired a 25% stake in the asset management arm of Sanlam last year. At the end of last year, Sanlam Investments had around R649 billion in assets under management.

Absa’s investment management unit supervised R263 billion at the end of December.

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