African Rainbow Capital (ARC) is a good example of how BEE capital should be put to work. While little is heard about what, say, Wiphold and Brimstone have done with the proceeds from Old Mutual’s empowerment deal, Sanlam’s empowerment partner Ubuntu-Botho Investments (UBI) has reinvested some proceeds into ARC, a new investment company. The investment in Sanlam has created significant wealth. Starting with a small deposit of about R200m by chair Patrice Motsepe, the 13% holding in Sanlam that UBI now holds is worth R20.5bn. In 2015 Motsepe decided it was time to diversify — though certainly not to exit Sanlam. It helped that there were several old bulls in the Sanlam kraal ready for new challenges: the then CEO Johan van Zyl, the former head of investments Johan van der Merwe and the former Santam finance director Machiel Reyneke. Since listing in September last year the value of the portfolio has increased by more than 80% to R8.15bn, with most of the growth in the diversified non...

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