Sanlam and Alexander Forbes have announced two transactions in which they will buy divisions from each other.
Sanlam will pay R200 million for Alexander Forbes’ individual client administration business, which will become part of Glacier by Sanlam.
Alexander Forbes will continue to own the clients whose funds will be managed by Glacier, and it will receive the inflows that Glacier will invest in Alexander Forbes’ funds.
Alexander Forbes, South Africa’s largest pension funds administrator, will pay R154m for Sanlam’s stand-alone employee benefits retirement fund administration operations (excluding the administration of its commercial umbrella fund and large industry umbrella funds). This will increase Alexander Forbes’ members under administration by 40%.
“The increased membership base presents the opportunity for Alexander Forbes to connect with South Africa’s largest distinct pool of retirement fund members (outside of the Government Employees Pension Fund) as we shift our strategic focus towards engaging with and serving the financial needs of individual clients,” Alexander Forbes said.
It said the sale of the individual client administration business “aims to modernise the digital experience delivered to our financial advisers and clients through the improved user functionality that is enabled by the best-in-class technological capability of the Glacier system. This will enable Alexander Forbes to better compete in the retail segment for compulsory and discretionary savings.”
Sanlam said it decided to sell its operations in large stand-alone retirement fund administration to focus on areas it considers key to its future positioning. These include umbrella fund administration, group risk underwriting, investment management, life investments, consulting services and health solutions.
The effective date of the transactions will depend on the fulfilment of certain conditions, including regulatory approvals, and is expected to occur during the first half of 2022.
Alexander Forbes sold its short-term insurance business to Momentum Metropolitan Holdings in January last year and its group risk and retail life insurance business to Sanlam earlier this year.
