Sanlam Plans Private Markets Expansion Targeting South African Wealthy Investors

Sanlam, Africa's largest insurer, plans to significantly increase its investment in private markets, aiming to raise its allocation from about 6% currently to an initial target of 10% to 15%, with a long-term goal of 30%. This strategic shift is driven by the shrinking public markets in South Africa, where the number of companies listed on the FTSE/JSE Africa All Share Index has declined, causing investors to be overly reliant on government debt. Sanlam's CEO, Paul Hanratty, emphasized the need to diversify client savings beyond traditional public market investments into private equity and private debt to support better returns. The company manages nearly R1 trillion ($57-$58 billion) in assets and plans to first offer private market products to wealthy clients before expanding access more broadly. This move aligns with a global trend, as firms like BlackRock seek to increase individual investors' exposure to private markets substantially. Despite growing scrutiny in the sector following recent U.S. firm collapses, Sanlam expects this focus on private markets to drive annual earnings growth above inflation and achieve returns on equity above 20%.