14 April 2016
Patrice Motsepe today (Thursday 14th April 2016) announced the launch of a dynamic new investment company, African Rainbow Capital (ARC). ARC will focus on financial services and private equity in South Africa within a pan- African context.
Motsepe is the chairman of ARC while Johan van der Merwe and Johan van Zyl are joint CEOs. Machiel Reyneke is an executive director while Rejoice Simelane, Andrew Matube and Tom Boardman are non-executive directors, with Boardman, the former CEO of Nedbank, taking on the role of chairman of the audit and risk and investment committees.
ARC is a wholly owned subsidiary of Ubuntu-Botho Investments (UBI). The shareholding of UBI includes Sizanani-Thusanang Helpmekaar Investments, Sanlam Ubuntu-Botho Community Development Trust, and several other broad-based economic empowerment groups. These groups hold a significant stake in the new entity and consist of 20 investment entities, including provincial public companies, women’s groups and trusts, churches, youth organisations and trade unions.
UBI was created in 2004 with the initial main purpose to build black controlled capital through being Sanlam's empowerment partner. In addition, the vision of UBI from the outset was to make a difference in the lives of ordinary South Africans by being the premier black owned and controlled financial services entity. Today UBI’s shareholding in Sanlam stands at 14.5% and is valued at about R17bn.
This capital is now being partially invested in ARC, which is set to become a leading South African based, black owned and controlled financial services company.
Motsepe says that the key to ARC’s philosophy lies in the principles of Ubuntu. “We believe in instilling a culture of good corporate governance at board level which then filters down throughout the entire organisation. We engage with our stakeholders with transparency, honesty and respect, and insist on ethical conduct,” he said.
Joint CEO Johan van Zyl says that ARC’s business philosophy is two-fold: to benefit its stakeholders and positively contribute to the lives of all South Africans.
“We would like ARC to become the leading provider of financial services, covering the full spectrum of services such as life insurance, health care, asset management, general financial services, short term insurance, property and banking.
“We plan to do this by building strategic partnerships, both here in South Africa and further afield, by obtaining equity stakes in product providers. We plan to create value for our shareholders by astutely managing our capital in order to strategically create the best return on equity,” van Zyl said.
Joint CEO Johan van der Merwe said that the idea of ARC had been on the cards for a while. “The idea was born some time ago. Our mission was to launch a world-class black owned and controlled, diversified financial services and investment company.
“Our aim is to initially put the main building blocks of Banking, Asset Management, Property, Private Equity, etc. in place and use them as a platform to engage in the rest of the value chains for each building block. There are a lot of businesses out there which we are excited about – the opportunities are vast.
“We anticipate that the funds generated by the Ubuntu-Botho Development Trust - more than R100m per annum - will be ploughed back into good causes,” van der Merwe concluded.