The Competition Commission has approved the proposed merger between the Anchor Group and London-based boutique wealth manager Credo.
Anchor announced in November last year that the merger will create a combined entity with assets under administration of more than R230 billion. This, according to chief executive Peter Armitage, will make Anchor one of the biggest wealth and asset managers in South Africa.
On Friday, the Competition Commission said the proposed transaction is unlikely to substantially reduce or prevent competition in any market. The merging entities have committed to a historically disadvantaged persons ownership condition.
In a statement in November last year, Armitage said about two-thirds of the combined group’s assets will be in global markets.
Credo provides wealth management services to predominantly high-net-worth clients and operates a global investment platform. The business has about £4.6bn in assets under custody. This, together with Anchor’s R120bn of assets, will almost double the size of the business, Armitage’s statement said.
In an interview with News24, Armitage said: “Our high-net-worth clients have anywhere between 30% and 80% of their assets outside of rands – they’re basically global investment citizens, and this [the merger] just expands the ability to service them from anywhere in the world. So, the logical next step is to globalise the business rather than buy other businesses in South Africa. The regulatory pressures and costs in asset management businesses are going up quite dramatically, so scale becomes important. Having critical mass is quite crucial, as you need investment depth across the globe to invest effectively.”
Regulatory approvals are pending, but the deal is expected to become unconditional within a few months.
A special purpose vehicle, CACM Investments Limited, has been created to facilitate the transaction. CACM, which is controlled by a trust, is incorporated in the British Virgin Islands.
Credo, also incorporated in the British Virgin Islands, is a holding company whose main operating subsidiary, Credo Capital Limited (CCL), is incorporated in the United Kingdom.
CCL’s market segments include private clients, financial intermediaries, and asset management.
The Credo Group was co-founded by South African Roy Ettlinger, its current chairman, in 1998.
Anchor has said the merged entity will be roughly 80%-owned by its existing shareholders.
Mining magnate Mike Teke holds about 25% of Anchor, while the remaining 30% is held by Capricorn Capital Partners.
