US financial giant boosts interests in emerging markets with stake in Alexforbes

Alexforbes headoffice in Sandton, Johannesburg. Photo: Supplied

Alexforbes headoffice in Sandton, Johannesburg. Photo: Supplied

Published Aug 10, 2022


US group Prudential Financial and LeapFrog Investments has taken up a 33 percent in local financial services company Alexforbes Group Holdings after a partial offer to shareholders concluded on Friday.

Alexforbes announced in March this year that Prudential was interested in increasing its stake in Alexforbes in a bid to enhance the US financial giant’s emerging market strategy.

Alexforbes Group Holdings said on Monday that the investors had increased their shareholding to 33 percent with the purchase of a 14.83 percent stake, following the implementation of the Mercer Sale Agreement, and through the acquisition of 246 047 621 Alexforbes shares in terms of a partial offer to all shareholders.

The partial offer constituted about 18.2 percent of Alexforbes’ issued shares as at July 8.

The partial offer attracted acceptances in respect of 125 084 399 shares, and excess tenders of 129 946 189 shares.

The excess tenders were scaled back such that 93.08724 percent of each excess tender would be accepted.

The partial offer price was R5.05 per share. Alexforbes’ share price fell 1.93 percent on Monday to R4.58 on the JSE.

Prudential this month reported an adjusted book value per common share of $104.19 (R1725) n the second quarter compared with $104.39 per share for the year-ago quarter. Its parent was highly liquid with assets of $7.1 billion versus $4.9bn for the year-ago quarter. Assets under management came to $1.41 trillion versus $1.73 trillion for the year-ago quarter.

Alexforbes chief executive Dawie de Villiers said in the annual report released at the end of last month that after completing three years of a successful turnaround plan the aim over the next five years was to focus on extending the group’s leading position across administration, retirements, healthcare and investments.

“We are well-positioned to rapidly transform the business into the most inclusive retail financial advice firm in South Africa, obtaining scale by advising customers sourced from our institutional clients and beyond,” he said.

“Ultimately, we want to transform into the most inclusive retail financial advice firm in southern Africa. To achieve this, we will continue to modernise our customer experience by enhancing digital capabilities and automating fund administration. We will also continue refreshing the Alexforbes umbrella fund to leverage our scale and differentiated offering.

“In addition, we will continue to lead the change by heightening our focus on ESG (environmental, social and governance) and the implementation of the Alexander Forbes Investments Transformation Policy,” he said.

According to the report, Alexforbes has developed significant intellectual property in the ESG arena and can leverage the global expertise of Mercer, as well as both Prudential Financial and LeapFrog Investments into the future.

“We can use this expertise to objectively and credibly evaluate the ESG credentials of the asset managers in our panel and enforce transformative change within our portfolios to deliver upon our ESG ambitions… we are at the forefront of leading standards and discussions on ESG, pioneering our insight and sharpening our acumen in this field,” the group said in the report.

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