Prudential Investment Managers has announced that it will be further strengthening its ties with its global global parent and founding shareholder, M&G Investments, taking advantage of new opportunities that have arisen from the de-merger of M&G from Prudential in October 2019.

M&G is now a publicly listed and dedicated international savings and investment business offering both asset management services and insurance-wrapped savings products.

Prudential will become one of M&G’s investment management hubs, adding Cape Town to the list of asset management centres in London, Chicago, Singapore and Paris.

M&G is planning to increase its ownership in Prudential by 0.13%, from the current 49.99% to 50.12%, returning to a position of majority shareholder. Prudential will again become a subsidiary of M&G, and no longer be an associate.

Graham Mason, Chairman of Prudential South Africa and Chief International Officer of M&G, said: “It’s an important step for M&G to bring Prudential South Africa back as a group subsidiary, since we know the company fits exceptionally well with our international expansion strategy.”

“Prudential’s long-standing investment expertise in emerging markets, particularly in Africa, is very well-respected, and operationally it has consistently maintained a soundly managed and profitable business since it was founded. Our investment teams have been cooperating for a long time now and know each other well, and I’m sure this greater integration will create additional synergies that will benefit the clients of both companies.” 

The Prudential Staff Investment Company (PSI) will raise its shareholding in Prudential from the current 28.01% to 28.08%, in a related and fully cash-funded transaction.

Thesele Group, Prudential’s black empowerment partner for the past 14 years, has offered to marginally decrease their shareholding in Prudential from 22.0% to 21.8% to facilitate the above transactions.

Sello Moloko, Thesele Group co-founder and Executive Chairman, said: “Thesele has enjoyed an excellent partnership with Prudential since our initial investment in 2005. Having served on the Prudential South Africa Board for many years, we welcome cementing even closer ties with M&G following the increase in its ownership.”

“We are fully supportive of and excited by Prudential’s alignment to the global M&G identity and are confident that this development will set the business on an accelerated growth path. Thesele remains appreciative of the support that M&G, and especially its South African office, has provided us throughout the years. Notably, we are proud of the growth and transformation that have been achieved as a consequence of this partnership. This has contributed to Thesele being able to build a sustainable, diversified portfolio of investment holdings across a variety of industries.” 

Bernard Fick, Prudential South Africa CEO, added: “We are excited about our closer alignment with M&G Investments, and the opportunities it creates for our clients and staff. M&G’s decision to increase their ownership, and our staff’s vote to raise their indirect shareholding in our business, are material votes of confidence in what we can still achieve in future. We look forward to more integrated sharing of investment ideas and research, including critically important areas such as sustainability and ESG (environmental, social and governance factors), and a strong future together.” 

The transaction is still subject to approval by the concerned regulatory authorities.

It is anticipated it will be concluded during the second quarter of 2021.