ARC buys 49% stake in Sinayo Securities

07 November 2016

Billionaire Patrice Motsepe’s investment vehicle, African Rainbow Capital (ARC), continued its spending spree since its launch earlier this year after it bought a 49 percent stake in Sinayo Securities for an undisclosed amount.

Motsepe said Sinayo’s initiative was meant to boost the number of black professionals in the securities sector.

“On the community development and skills development front, ARC will provide Sinayo Securities with additional annual financial support. This will allow Project Funda specifically, to extend the employment placement assistance for graduates even further,” Motsepe said.

Project Funda is Sinayo’s flagship graduate training programme that trains black talent about research and leadership in financial services.

ARC was formed earlier this year with a R10 billion commitment from Ubuntu-Botho investments after Motsepe and two former Sanlam veterans - Johan van Zyl and Johan van der Merve - who serve as ARC’s joint chief executives, while Motsepe is the chairman.

Sinayo was until recently the only member of the JSE that had 90 percent black female ownership - it will henceforth operate under dual branding. The company specialises in South African listed firms’ equity sales and trading.

Babalwa Ngonyama, the chief executive of Sinayo Securities, said the investment by ARC into Sinayo had provided the capital injection it needed to expand its institutional client base and its brokerage services.


“We believe that this partnership will unlock opportunities for our business. ARC will enhance our service offering as it brings a depth of financial services experiences and industry relationships that will be of benefit to our business and its clients,” Ngonyama said.

She said as an offshoot of the transaction, Sinayo had more capital to allow it to facilitate and assist its clients when they trade large volumes.

The deal is ARC’s fourth acquisition for the year.

It made its first investment in June when it bought a 20 percent stake in luxury residential estate Val de Vie for between R100 million and R200m.

In July, the company said it had bought a 29.9 percent stake in CMB International for a stake in independent banking advisory firm Bravura.

In September the company bought an 18.36 percent in construction materials firm, Afrimat for an undisclosed figure and last month it wrote a R753m cheques to buy a 10 percent stake in Alexander Forbes.

Johan van Zyl, the co-chief executive of ARC, said the injection of fresh capital would support Sinayo’s growth plans and expand its brokerage firm to new markets. “This transaction enables Sinayo to expand the scope and capacity of its brokerage activities over the medium term to include a large number of portfolio trades, equity derivatives trading, and participation in an international equities trading platform with access to global equities research.”

The deal would not see a change in the management structure of Sinayo but ARC’s senior executives would be represented on its board.

Khumo Shongwe, the chairwoman of Sinayo, said the deal would benefit its women shareholders and was a vote of confidence in black women’s leadership abilities. “As women become leaders in the financial services industry, we will create footprints for other women to follow. The deal could be a catalyst for a culture of inclusion and transformation.”