African Rainbow Capital (ARC) has acquired a majority shareholding in QED, the largest independent actuarial advisory business in Africa, for an undisclosed amount.

Johan van Zyl, co-CEO of ARC, said: “A key element of our investment strategy is to build a portfolio of financial services investments, whereby we leverage our existing investments and relationships to diversify our investment holdings and thereby create value for shareholders.”

“We believe QED will add significant value to existing companies in the ARC Investments portfolio as well as clients outside of the portfolio. Our management is currently driving synergistic opportunities between portfolio companies and we believe QED will assist in delivering a much-needed service to some of our existing investments. If we can unlock these opportunities, value will be created for all portfolio companies involved and therefore shareholders in ARC Investments stand to benefit.”

QED is headquartered in Johannesburg, South Africa with regional offices in Mauritius, Kenya and Nigeria.

QED operates across 17 countries in Africa with their specialist advisory teams offering actuarial and risk management solutions to life and non-life insurers, healthcare providers, pension funds, banks, regulatory and industry bodies, insurance associations, retailers and developmental organisations. 

The business provides employment to 56 people, including 18 qualified actuaries. Following this transaction, QED is expected to further grow its staff complement.

The transaction is done through ARC Financial Services, the financial services arm of ARC. 

A total of 49.9% of the shareholding in ARC Financial Services is held by ARC Investments, the JSE listed and Mauritian incorporated investment entity. 

The transaction creates growth opportunities for both parties and it elevates QED to the status of the largest majority black-owned actuarial firm in both South Africa and the rest of Africa. 

QED believes that its attractive empowerment status will bolster its growth ambitions and its partnership with ARC could fund future acquisitions.

Craig Falconer, QED CEO, said: “We have followed closely the development of ARC over the last three years and we are excited to enter into this partnership.”

“The key value we see ARC offering QED is its solid, broad-based empowerment credentials combined with its financial strength. ARC has a strong balance sheet that allows it access to capital to fund QED’s future growth opportunities. Significant opportunities exist, in South Africa and elsewhere on the continent, to acquire strategically relevant businesses to both expand and deepen our footprint on the continent. This partnership is one from which QED clients, employees and broader stakeholders stand to benefit.”

Falconer added: “While Africa remains our immediate focus, this transaction does afford us the longer-term opportunity to look at acquisitions beyond the continent where there are a significant number of independent consultancies with whom we could form partnerships.”

ARC will not assume operational control, despite it acquiring a majority shareholding. 

The two partners have agreed that ARC will appoint two representatives on the QED Board of Directors, of which one may be the position of Chairperson of the Board. 

QED management will continue to drive the implementation of the company’s strategy and related operational responsibilities.