Sanlam buys Capital Legacy stake, takes out Brightrock minorities

South African financial services group Sanlam has recently made strategic moves to enhance its fiduciary offering by acquiring a stake in Capital Legacy and taking out minorities in Brightrock. In a recent interview with CNBC Africa, Anton Gildenhuys, CEO at Sanlam Retail Affluent, shared insights into the rationale behind these transactions and the expected value they would bring to the company. The Capital Legacy acquisition, founded in 2012, is set to complement Sanlam's existing capabilities in estate administration and trustee services. With Capital Legacy's strength lying in client engagement and estate planning, the merger aims to create a comprehensive fiduciary solution in the South African market. Gildenhuys emphasized that the focus is on growth and synergy rather than cost-cutting, highlighting the potential for significant cross-selling opportunities and operational efficiencies. The move is also seen as a step towards financial inclusion, targeting the entry-level market which has been underserved in estate management services. On the other hand, the purchase of Brightrock minorities aligns with Sanlam's multi-pronged strategy in the risk market. By integrating Brightrock's innovative risk business model with its existing offerings, Sanlam aims to capitalize on synergies in capital management and operational efficiency. While maintaining Brightrock as a separate division with its unique proposition and management style, Sanlam anticipates savings from consolidating licenses and leveraging its scale. The strategic acquisitions are expected to deliver long-term value to shareholders by unlocking capital synergies and enhancing the overall value proposition for clients. While immediate benefits may be seen in operational efficiencies and cross-selling opportunities, the full impact of these transactions is likely to materialize over the next 12 to 24 months. Gildenhuys highlighted the importance of a seamless integration process to realize the value of these acquisitions, emphasizing the strategic fit and commercial rationale behind the transactions. As Sanlam continues to strengthen its foothold in the South African financial services industry, the acquisitions of Capital Legacy and Brightrock signal a strategic shift towards a more comprehensive and competitive fiduciary offering.