Storybook 01: South Africa’s Economic Output STANLIB Economics.
STANLIB Limited
description
Transcript of STANLIB Limited
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
STANLIB Limited
Acquisition by a BEE consortium of 25,2%
18 June 2003
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
STANLIB – company profile
• Asset and wealth management group
• Created in 2002
• Combined Liberty and Standard Bank– asset management – unit trusts – linked product businesses
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
STANLIB organisational structure
Liberty Group
STANLIBLimited
STANLIBAsset Management
STANLIBWealth Management
50%50%
100%100%
Standard Bank Group
“The factory” “Product / marketing /distribution arm”
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
STANLIB Asset Management AUM 31 December 2002
128,4TOTAL AUM
1,1Africa
30,2Unit trusts
43,5Segregated funds
53,6Life funds
R’billion
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
STANLIB Wealth Management FUA 31 December 2002
51,9TOTAL FUA
7,9Linked products
10,4Structured products
28,8Single manager unit trusts
R’billion
4,8Other
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Value and fairness opinion
• STANLIB valued at R1,4 billion for purposes of the transaction
• Independent fair and reasonable opinion given by Deutsche Securities as to Liberty’s sale price for 12,6% of STANLIB
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
STANLIB’s equity value has declined since its formation (from R1,8 billion to R1,4 billion) Relatively poor-performing equity markets have resulted in:• a decline in the ratings of asset managers;• a decline in assets under management; and• a decline in operating earnings
JSE ALL SHARE INDEX & PE RATIO
0
2,000
4,000
6,000
8,000
10,000
12,000
Jan-00 Jan-01 Jan-02 Jan-03
Ind
ex
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10
12
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16
18
20
PE
Rat
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tim
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JSE All Share Index JSE All Share Index PE ratio
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
MultiplesSTANLIB ASSETS UNDER MANAGEMENT AND FUM MULTIPLE
0,98%0,92%
1,19%
0,81%0,78%
1,00%
20,000
70,000
120,000
170,000
220,000
31-Dec-00
Actual
31-Dec-01
Actual
31-Dec-02
Actual
31-Mar-03
Actual
31-Dec-03
Forecast
FU
M (
R'm
illio
ns
)
0,2
0,4
0,6
0,8
1,0
1,2
1,4
FU
M m
ult
iple
(%
)
STANLIB Asset Management Assets Under Management
STANLIB Wealth Management Funds Under Administration Equity value / FUM (excl. unit trusts in WM)
Equity value / total FUM
%
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Rationale for transaction
• National and business imperative to introduce empowerment partnership
• Liberty and Standard Bank actively involved in the process of transformation in South Africa
• Establishment of an empowerment partnership with the goal, inter alia, to support South Africa’s socio-economic objectives
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Benefits
• Maintenance of current PIC and other asset management mandates
• Increased fund inflows demarcated specifically for empowered asset managers
• Future business opportunities including expansion into Africa
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Consortium • Safika (51%)
– Investment holding company which facilitates greater black economic participation in South Africa
– Directors include Saki Macozoma, Moss Ngoasheng and Vuli Cuba
• BBET (35%)– Created for the benefit of organisations
representing broad-based communities from historically disadvantaged backgrounds
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Consortium, continued
• Nduna Trust (9%)– Personal trust of Ronnie Ntuli who:
• Is a respected advisor to South African and international corporates and investors
• Immediate past President of the Johannesburg Metropolitan Chamber of Commerce and Industry
• Recently appointed CEO of Andisa Capital
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Consortium, continued
• Simeka (5%)– Investment holding company which
provides management consulting, capacity building, employee benefits solutions, communications and marketing services to the Government, public sector and international agencies
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Transaction
• Newco will be owned 51% by Safika and 49% by the remainder of the Consortium
• Newco will acquire 25,2% of STANLIB, 12,6% from each of Standard Bank Group and Liberty Group
• Newco is incentivised to introduce new mandates
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
* Listed on the JSE Securities Exchange South Africa
( ) Denotes current shareholdings in STANLIB
Safika Nduna
Newco
51%
100% 100%
BBET
35%
STANLIBAsset
Management
STANLIBWealth
Management
Simeka
StandardBank*
Liberty Group*
9% 5%
25,2%
STANLIB
37,4%
(50%)
37,4%
(50%)
Proposed future structure
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Dividend policy
• 100% of profit after taxation per annum, subject to working capital and capital expenditure requirements, while the BEE funding is outstanding
• Thereafter subject to STANLIB board’s discretion, subject to a mimimum of 50% of profits available for distribution
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Composition of the Board
• The Chairman will be Saki Macozoma, who will make himself available to be appointed as the Chairman of STANLIB for a mimimum of three years
• STANLIB board will consist of maximum 16 directors
• The Consortium will have the right to appoint one executive director
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Composition of Board, continued• Nominations pro rata to shareholding at the time,
subject to a minimum of 10% shareholding required to appoint the first director
• Newco entitled to appoint Chairman of STANLIB, subject to Standard Bank and Liberty approval
• Liberty entitled to appoint CEO of Asset Management
• Standard Bank entitled to appoint CEO of Wealth Management
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
Exclusivity
• Newco will be the exclusive empowerment partner of STANLIB in Africa (subject to commercial necessity)
• In return, Newco and all of its shareholders have undertaken to restrict their investment in asset management and wealth management in Africa to STANLIB
SIMEKA INVESTMENT HOLDINGSSIMEKA INVESTMENT HOLDINGS
In summary
• We remain proactive in developing the empowerment credentials of Standard Bank Group and Liberty Group
• STANLIB empowerment structure now introduced
• Andisa Capital was launched recently
• More on the horizon…