Former Liberty CEO Thabo Dloti, who left after clashing with the board about the insurer’s strategic direction, has made a comeback, with a plan to shake up the asset-management industry in which black participation is still minimal.
Investment management company Sithega Holdings, cofounded by Dloti, on Monday formally launched its partnership with fund manager and stockbroker Prescient, which delisted from the JSE in 2017.
It will see Prescient become a majority black-owned asset management company.
Sithega and Prescient first announced a possible empowerment deal in April 2018, but it took another year to implement the transaction.
Prescient had to obtain regulatory approvals in the jurisdictions where it operates, which include China, Ireland, Namibia and Botswana.
With all approvals now in place, Prescient founder and executive chair Herman Steyn said the firm was ready to grow into a mid-sized independent asset-management company.
“It’s a very important time for us,” he said.
“We have now been in operation for 21 years.
“What we are hoping to achieve is scaling for growth.”
Being a majority blackowned company will count in favour of Prescient as pressure to transform the asset-management industry intensifies in SA.
In 2018, the annual industry transformation survey published by 27four Investment Managers showed that black asset management firms managed only 6% of all savings and investments and 0.8% of unit trust assets in SA.
Steyn said the share of assets available for stand-alone asset managers was smaller.
The consolidation of pension funds and a shrinking retirement savings market as people lose jobs also means asset managers and administrators have a tough road ahead.
Dloti said it was easy to set up a new asset-management company but not that easy to succeed in the industry.
However, with 21-year-old Prescient as a partner, Dloti said Sithega had the backing of a business that had what was required to succeed.
Prescient said that it had wanted to work with Dloti since his days at Old Mutual and held a meeting with him the day after he left Liberty.
Before becoming CEO at Liberty, Dloti headed the insurer’s asset-management business, Stanlib.
Before that he was the CEO of Old Mutual Investment Group SA.
Dloti left in early 2017 after Liberty had just recorded a 45% decline in profits for the 2016 financial year.
The insurer, which has market capitalisation of about R29bn, embarked on a new strategy focusing primarily on the SA market, which has helped it increase profits again.
Dloti and former Discovery Insure CEO Themba Baloyi founded Sithega late in 2017.
The company offers asset management, life insurance and short-term insurance.
Sithega bought a 75% controlling stake in Prescient Empowerment Trust for R360m.
The trust now owns 56% of Prescient Holdings.
The remaining stake is owned by Prescient founders (22%), staff members and other minority groups.
“It’s my quest to transform the asset management industry and everywhere I’ve been, I tried to do that,” Dloti said.
Prescient has R88bn in assets under management and R416bn in assets under administration. –Business Day