Sanlam, Backed by Motsepe, expands private market investments in South Africa

Sanlam Limited, Africa’s leading insurer, partially owned by South African billionaire Patrice Motsepe, is deepening its push into private market investments as it seeks new ways to generate returns in a tightening public market.

The Cape Town-based group plans to increase its exposure to private equity and private debt, expanding beyond publicly traded assets that have long dominated its investment mix. 

“In South Africa, we’ve still got very limited private markets,” Sanlam Chief Executive Officer Paul Hanratty said in an interview. “We’re sitting at about 6 percent of assets, and I think 10 percent to 15 percent is probably where we should move first,” he said, adding that the long-term goal is to lift that figure to about 30 percent.

Shrinking public market drives shift

Hanratty said South Africa’s shrinking public markets are forcing investors to seek alternatives. The number of companies listed on the FTSE/JSE Africa All Share Index has fallen to 122, down from 143 in early 2022 and 166 a decade earlier, according to Bloomberg data.

“The traditional way of deploying client savings has been into the public markets, whether it was debt or equity,” Hanratty said. “There’s no question we need to increase investments into private markets over time.” He expects the move to bolster Sanlam’s bottom line, targeting annual earnings growth of at least 6 percent above inflation and a return on equity exceeding 20 percent. 

Sanlam, which manages nearly R1 trillion ($58 billion) in assets, will start by offering new private market products to its wealthiest clients before expanding access to retail investors and regional markets.

Global appetite for private assets

Sanlam’s move reflects a wider global trend. BlackRock Inc. has said it wants to increase individual investors’ exposure to private markets to as much as 20 percent, while Bain & Co. projects private-market assets under management could reach $65 trillion within a decade—triple 2012 levels. 

Still, the sector faces growing scrutiny after the collapses of U.S. firms First Brands and Tricolor Holdings raised concerns about risks tied to private credit. JPMorgan Chase CEO Jamie Dimon warned that “when you see one cockroach, there are probably more,” while the Bank of England recently noted similarities between the $1.7 trillion private credit boom and the subprime crisis.

South Africa remains the continent’s wealth hub, accounting for 34 percent of Africa’s millionaires—roughly equal to the next five wealthiest nations combined.

Motsepe’s influence and new acquisitions

Motsepe, who holds an indirect 7.8 percent stake in Sanlam through Ubuntu-Botho Investments, continues to play a key role as vice chairman. His influence remains central to the group’s long-term ambitions of strengthening its leadership in African insurance and financial services. 

Sanlam reported a 6.9 percent increase in first-half profit to $654 million, supported by gains from its life, general insurance and investment management businesses. The company also struck a deal to acquire Old Mutual’s Medhold business, expanding its footprint in Africa’s fast-growing healthcare sector.