One firm that has been pushing into the UK space with some brio is Sanlam Private Investments, the firm that has roots in South Africa.

It is perhaps easy when regulations mount to overlook the entrepreneurial gusto that still exists in wealth management. One firm that has been pushing into the UK space with some brio is Sanlam Private Investments, the firm with roots in South Africa and now spreading its reach. It is a company that wants to bring new ways of doing business to the British market, it told this publication recently.

The broader Sanlam Group has had a strong focus on emerging markets and a good deal of that emphasis will remain but the business has started to go after revenues in the developed economies to a greater degree than before, Craig Massey, chief executive of Sanlam Private Investments, said at his London offices.

SPI caters to high net worth individuals and offers bespoke portfolios and investment ideas, with a target market for people with at least £500,000 ($683,495). Another Sanlam-branded business, Sanlam UK, has been recently buying a number of IFA practices, tapping a market shaken up by the changed regulatory climate created by the UK’s Retail Distribution Review.

Progress in the past year or so has been rapid, but not at breakneck speed, which given the mistakes some firms have made in the past of expanding too fast, only to have to retrench when markets turned south, is perhaps wise. As far as Massey is concerned, he came into his present job in November 2012 and before that, he was head of stockbroking and portfolio management at SPI in South Africa. When he took up the CEO slot, the firm had £1.6 billion of client assets under management; it now has around £2.7 billion of AuM, which includes assets under advice and influence. Expansion is measured rather than helter-skelter.
The Sanlam brand is not really a household name in the UK market, but its brand visibility - a key issue in the post-RDR world - is rising. Last year, SPI became a sponsor of Saracens, the UK rugby union club. (Needless to say, such a deal was a joy to a proud, rugby-mad South African such as Massey.) The business has bolstered its presence in the UK, for example, by a string of appointments over recent months (for more detail, see here). SPI is looking at a number of acquisitions to increase its wealth management presence.

“In the UK, it is about trying to build a similar model to what we have in South Africa: which is a private client focused integrated asset management, stockbroking and wealth management business. We provide most of the services offered by our private bank competitors with the exception of transactional banking,” Massey said.

The firm made its moves in the UK with the acquisition of discretionary fund manager Principal Investment Management in 2008, followed by two further acquisitions in this space: Border Asset Management and Ian Nicholson Investment Management. Merchant Securities, the stockbroking business, was acquired in 2012. All businesses were rebranded by the beginning of 2013 under the Sanlam mother brand but operate in three entities: Sanlam Private Investments UK, Sanlam Private Investment Wealth Management and Sanlam Securities UK Limited.

“If you look at our footprint we are really focused in the Southeast and Southwest and North,” Massey said.
Among recent hires have been those of James Bardner, senior investment manager, who joined the Kirkby Lonsdale office from Coutts; Richard Kirkham, investment manager (he joined Harrogate office from Midas Investment Trust); Craig McPherson, business development manager, North (joined from Barclays; Jonty Warneken, head of intermediary services, North (joined from Da Ponte Consulting and Wealthmasters Financial Management); Simon Woodliss, senior investment manager for South East (joined from Barclays Private Banking) and Paul Mansfield, investment manager, South West (formerly of Hargreave Hale).
Development
An area Massey wants to explore – that has been a feature for some time in South Africa – is lending where an investment pool is collateral. “We have a big balance sheet in South Africa but we don’t have one here yet. That [collateralised lending] is something we are exploring,” he said. Given the reluctance of banks to lend, given their own constraints and the regulatory limits, this is an opportunity, although Sanlam will want to avoid mistakes here.

This sort of approach seems to happen with South Africa-based firms. Another firm with strong South Africa origins – Investec – has made a name for itself through a range of specialist wealth management and banking offerings. Maybe it takes the experience of a “New World” market honed thousands of miles away to shake up business practices in the UK.

Massey would seem to agree. “We bring a global outlook on investments,” he said, noting that a lot of UK investors have been UK-centric, although this is changing.

He says that one of the benefits of Sanlam is how it can make full use of its overall group research capability: “A lot of the research work we do at SPI UK starts with the use of quant-based screening tools  to narrow the universe of potential investments  and then we do further fundamental analysis on this smaller group.”

The South Africa connection works in several ways. “We have got a lot of South African clients with us who have bought into our global equity offering which is managed out of our London office. There is a strong direct equity culture in South Africa. In the UK, we have found that clients are more accustomed to collective investment approaches,” he said.

“Part of the difference in approach maybe that there is more of a wealth-creation culture  in South Africa, with fewer people with inherited wealth, as opposed to the wealth preservation culture of the developed markets,” he said.

“The firm builds portfolios for different risk appetites, but has cut the range of offerings to provide a simple, clear range for independent financial advisors,” he said.

“If you go into the IFA community you need to have a very concise and easily understood offering,” he said.

Being concise and easy to understand are qualities this writer appreciates greatly. If those qualities remain front and centre of Sanlam Private Investments, this firm will thrive in a market characterised by needless complexity for far too long.