South Africa’s first black billionaire, Patrice Motsepe, has launched a new money management firm with two former Sanlam veterans that could become an “influential” investor in Barclays Africa, BusinessDayLive reported.
The official launch of African Rainbow Capital (ARC) represents Motsepe’s plan to create a world-class, black-owned financial services giant.
The company’s focus will be on financial services and private equity investments, building interests in banking, insurance, distribution, asset management, property, and healthcare administration and management.
Forbes ranks Motsepe as the sixth richest South African, the 22nd richest African and Africa’s first black billionaire.
His company, Ubuntu Botho Investments, partnered with JSE-listed financial services group Sanlam to start the Africa-focused private equity firm.
African Rainbow Capital has a 10 billion rand ($684 million US) commitment from Ubuntu-Botho Investments.
The venture is jointly headed by former Sanlam CEO Johan van Zyl and former Sanlam Investments CEO Johan van der Merwe.
Barclays Africa CEO Maria Ramos attended the launch in Johannesburg’s Hyde Park to support her old boss, van Zyl, who sat on Absa’s board before it was bought by British bank Barclays and renamed Barclays Africa, BusinessDayLive reported.
Barclays is selling down its 62.3 percent stake in its African business. A consortium of investors led by the Public Investment Corporation is meeting with Barclays to discuss buying 10 percent of its shares, Bloomberg reported.
African Rainbow Capital is not part of the consortium, but “we are looking at what the possibilities are,” van der Merwe said.
If the deal is done in a certain way — such as Barclays selling some of the assets or splitting the retail bank and the investment bank — African Rainbow Capital could consider investing in the bank. African Rainbow Capital’s mandate is not to become a controlling shareholder in companies, but an “influential” one, holding about 25 percent of a company’s shares, he told BusinessDayLive.
The ARC board includes Motsepe as chairman; Van Zyl van der Merwe as joint CEOs; former Sanlam finance chief Machiel Reyneke; Rejoice Simelane, a Sanlam director and CEO of Ubuntu-Botho; African Rainbow Minerals Director Andrew Matube and Tom Boardman.
Motsepe spoke at the launch about his family’s background in entrepreneurship. South Africa has produced “exceptional black entrepreneurs,” he said, and more are emerging, BusinessTech reported.
Motsepe has benefited from South Africa’s Black Economic Empowerment laws, according to Forbes. BEE mandates that companies must be at least 26 percent black-owned in order to get a government mining license. In 1994, Motsepe bought low-producing gold mine shafts and made them profitable.
He founded African Rainbow Minerals, which mines and processes iron, manganese, chrome, platinum, copper, nickel, coal and gold. Motsepe also has a stake in Sanlam, and owns the Mamelodi Sundowns Football Club. He became the first black partner at the Bowman Gilfillan law firm in Johannesburg.
Motsepe said African Rainbow Capital is partnering with black business people to find investment opportunities including Matome Maponya Investments and former Polokwane mayor Freddy Greaver.
Jointly with Sanlam, African Rainbow Capital has already invested 200 million rand ($13.7 million US) in insurance broker Indwe Broker Holdings; and backed JSE-listed special purpose acquisition firm Capital Appreciation, BusinessDayLive reported. Other investments include PayProp, an online rental property manager; and Metrofibre, which provides fiber-to-the-home broadband solutions.
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