By Adelaide Changole.
Sanlam plans to increase its focus on private market investments, as Africa’s biggest insurer seeks to expand into a fast-growing corner of global finance.
The company wants to boost asset allocation to instruments that may include private equity and private debt, to help diversify away from publicly listed companies and other traditional destinations for its clients’ money.
“In South Africa, we’ve still got very limited private markets,” Sanlam’s chief executive officer Paul Hanratty said in an interview. “We’re sitting in South Africa at about 6% of assets, and I think 10% to 15% is probably where we should first move to, “for asset allocations to private markets, with 30% as the long-term goal.
South Africa’s shrinking public markets are driving the case for diversification, with a shortage of listed corporate debt leaving investors over-exposed to government debt.
The number of companies listed on the FTSE/JSE Africa All Share Index has shrunk to 122 firms, down from 143 at the start of 2022 and 166 at the start of 2012, according to data compiled by Bloomberg.
“The traditional way of deploying client savings has been into the public markets, whether it was debt or equity,” said Hanratty, whose group includes one of the country’s biggest wealth managers with nearly R1 trillion ($57 billion) in assets. “There’s no question that we need to increase investments into private markets over time.”
He sees the shift helping to drive Sanlam’s bottom line over the medium term, including annual earnings growth of at least 6% above inflation and delivering returns on equity above 20%.
Sanlam’s push is part of a wider shift. BlackRock wants to increase individual investors’ allocation to private markets from 5% or less to at least 20%. Bain & Co sees private-market assets under management reaching $65 trillion within a decade- three times more than in 2012.
Still, concerns are mounting about the sector following the collapse of US firms First Brands and Tricolor Holdings. Those cases prompted JP Morgan Chase & co chief executive officer Jamie Dimon to warn that “when you see one cockroach, there are probably more,” while on Tuesday the Bank of England warned of parallels between the $1.7 trillion private credit boom and the subprime debt crisis.
Sanlam will start with its wealthiest clients in South Africa before offering the product to retail customers and other markets.
“We’ll prioritise increasingly creating access to assets for institutional clients, so building out our own book of private equity and private debt, “Hanratty said.
South Africa accounts for 34% of Africa’s millionaires — roughly equal to the next five wealthiest countries combined, according to Africa Wealth report 2025.