Sanlam commits $196 million for 25% stake in ARC’s diversified investment portfolio

Sanlam Life, a subsidiary of Africa’s largest insurer Sanlam Limited, will invest R3.2 billion ($196 million) to acquire a 25% economic interest in the ARC Fund portfolio owned by billionaire Patrice Motsepe.

The transaction strengthens Sanlam’s alternative assets platform and deepens its strategic partnership with Ubuntu-Botho Investments(UBI). The deal gives Sanlam exposure to ARC’s diversified non-financial investments while excluding ARC Financial Services Holdings.

Expanding alternative assets exposure
Sanlam said the investment strengthens its collaboration with UBI in private equity and alternative investments across South Africa and the wider continent. UBI, a material shareholder in Sanlam, ultimately owns ARCI and UBI General Partner.

Through the deal, Sanlam Life gains access to a diversified portfolio of non-financial assets, broadening Sanlam Investments’ alternative assets platform, one of its fastest-growing solution areas alongside multimanager and passive strategies.

As of June 30, 2025, the portion of ARCI’s audited net asset value linked to the transaction stood at R12.5 billion ($660 million), with attributable profit after tax of R1.0 billion ($53 million).

Performance-linked fee structure
The agreement includes a performance-based outperformance participation fee payable to UBI General Partner, calculated on net asset value growth above a 23% annual hurdle over rolling three-year periods. 

The arrangement runs for nine years and is capped at R300 million ($16 million), inclusive of VAT. No other management fees will be payable.

Sanlam emphasized that fees will only arise if the portfolio generates returns exceeding the hurdle rate, aligning incentives with shareholder value creation.

ARC’s governance and strategic ties with Sanlam
Led by Patrice Motsepe, ARC, the investment holding company, has focused on identifying opportunities in South Africa’s and Africa’s financial services and diversified industries. Formed in 2015 as a subsidiary of Motsepe’s Ubuntu-Botho Investments, ARC’s roots trace back to 2004, with a mission to build black-controlled capital.

Given UBI’s related-party status under JSE rules, Sanlam established an independent non-executive directors’ committee and appointed Deloitte Consulting to provide a fairness opinion. Deloitte confirmed that the transaction terms are fair to shareholders.

The investment will not impact Sanlam Life’s discretionary capital and is expected to enhance long-term value while strengthening its alternative investment footprint across Africa.