As part of its strategic ambition to position itself as a leading Pan-African financial services leader, specialised financial services group Alexander Forbes is exploring opportunities for expansion in East and West Africa, as well as further afield in greenfield countries such as Morocco.
This follows the company’s unveiling in January of investment company African Rainbow Capital (ARC), a wholly owned subsidiary of Ubuntu-Botho Investments, as an empowerment shareholder in the group.
Alexander Forbes Group chief executive Andrew Darfoor says the overwhelming support for the transaction fully demonstrates that the company’s shareholders believe in the strategic merit and industrial logic of having ARC as a partner in the group’s endeavour to expand its reach into Africa.
Alexander Forbes’s principal geographic focus is in South Africa, where it has been operating since 1935 and where its headquarters are located in Johannesburg, as well as in sub-Saharan Africa, the UK and other selected jurisdictions that have employee benefits and legislative frameworks similar to that of South Africa. However, the group aims to leverage its expertise in the South African market – where appropriate – to drive growth in the rest of the continent, improve asset capture in the institutional business, provide solutions for the institutional member base and drive modernisation in the group’s technological environment.
ARC CEO Johan van Zyl similarly welcomed the approval of the transaction with Alexander Forbes, describing it as a landmark investment by ARC, which has a ten- to twenty-year vision to build a South African base and expand into the rest of Africa.
Darfoor highlights that expansion into other regions requires flexibility and a sound understanding of the economic, regulatory and social environments that prevail there.
“It is important to remind ourselves that Africa is neither a country nor a single market, but a continent of 54 countries. Therefore, you cannot have a one-size-fits-all approach when investing in the continent. Each market and country has unique characteristics and demographic trends, and one needs to customise one’s business strategy to ensure success.”
He notes that one of the biggest challenges in this endeavour remains gaining access to the latest information on market trends and other economic indicators to make informed decisions. Other well-documented issues include infrastructure bottlenecks and the need for improved education among the youth.
“For us at Alexander Forbes, however, there is also an increased regulatory obligation when it comes to ensuring transparency and treating customers fairly.”
Darfoor mentions that South Africa’s financial services sector now faces even greater regulatory scrutiny than before, as a result of the last credit crisis, which has led to the institution of additional regulations to protect the integrity of the sector and the clients of financial institutions. He adds that the company faces similar regulatory obligations across the rest of Africa and select emerging markets, stressing that, as a responsible financial services organisation, compliance with these is paramount in Alexander Forbes’s operations.
The company is also developing new solutions to ensure that its clients achieve a lifetime of financial wellbeing and security through insurance, retirement and investment products.
“Going forward, the focus will be on conducting extensive market segmentation and research to better enable us to create solutions that address our customer needs throughout their life journey. Our focus is to create and provide a clear value proposition that appeals to all the life-stages of our clients.”