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Sanlam Capital Markets (SCM)

Sanlam Capital Markets Proprietary Limited (SCM) was formed as a result of the restructuring by Sanlam Limited (Sanlam) of Gensec Bank Limited and Genbel Securities Limited (Genbel Securities) in late 2002 and early 2003.

While the banking licence was returned to the South African Reserve Bank (SARB) during the restructuring, the extensive financial engineering capabilities throughout the business have largely been retained in SCM. In 2005, SCM was incorporated into Sanlam’s Investment Cluster which is inclusive Sanlam Investment Management (Pty) Ltd, Sanlam Private Investments (Pty) Ltd, Sanlam Private Equities (SPE)and other key business units.

SCM is a niche capital markets operation, concentrating on providing debt and equity financial engineering solutions to clients. It also focuses on specific synergies with other businesses in the Sanlam group and gives the Sanlam group a substantial financial engineering capability. SCM has two broad focus areas, namely on balance sheet finance business and alternative investment business.

Alternative Investment Business

Sanlam Africa Real Estate Advisor (SAREA) is wholly owned by Sanlam Capital Markets Proprietary Limited (SCM). Sanlam Real Estate Advisor is the advisor to the Sanlam Africa Core Real Estate Investments Limited (“SACREIL”), a Mauritian listed investment vehicle that invests in commercial real estate in select countries in Sub-Saharan Africa. SACREIL is mandated to invest in core Sub-Saharan African properties, with little or no development risk and targets US$ total returns of 14% to 18%.

Sanlam Africa Credit Fund Advisor is the advisor to the Sanlam Africa Floating Credit Rate Fund (SAFRCF) a Mauritian fund that allows investors the opportunity to invest in listed and unlisted senior debt assets in select countries in Sub-Saharan Africa. The Sanlam Africa Floating Rate Credit Fund is a category 1 (global business licence) company incorporated in Mauritius. The Fund’s objective is to invest in yield-enhancing credit assets, which are denominated predominantly in USD, in specified African countries (excluding countries of the Common Monetary Area). The aim is to establish a sustainable annuity-income based Fund that will generate a total return comprising of income and capital appreciation.

On Balance Sheet Finance Business

Credit Investments, Property Finance & Fixed Income business provides a variety of financing solutions to our clients in South Africa and Africa such as:

The Sanlam Investments cluster has appetite to invest in credit instruments such as loans, bonds, preference shares and other hybrid debt issued by entities including corporates, parastatals, governments, empowerment entities and project finance companies. DSU originates and structures these credit investments on behalf of the cluster and focuses on private placements/unlisted debt that are tailor-made for investment by the cluster. Debt seeks to match the investment requirements of the cluster with the borrowing requirements of corporates and other entities. DSU provides debt advisory services and financial engineering capabilities to the Sanlam Group and to the market, on a selective basis.

Debt Structuring Africa functions on a similar basis to DSU but focusing exclusively on sourcing credit investments in an approved list of African countries (excluding South Africa).

Debt manages the SCM on-balance sheet credit portfolio and certain other credit portfolios within the Sanlam Group. The portfolio management function focuses on optimising the risk-adjusted return on the investment portfolio. Investments may be repackaged or sold and new investments may be made.

The strategic focus of Sanlam Properties has changed to that of structured property finance and related activities. The Property Finance business has been incorporated into the Credit Investments, Property Finance & Fixed Income business housed within Sanlam Capital Markets Proprietary Limited (SCM).

Sanlam Properties provides property finance to the commercial, retail and industrial real estate markets in terms of both new development finance and finance for existing property assets, predominantly in the South African Real Estate market. We are mandated to act as a financial partner in all facets of property related transactions.

Property sectors we have a key focus on include Commercial Office space, Retail and Industrial Properties.

  • Financing the purchase of commercial property assets
  • Discounting of the cash flows from a lease attached to a property
  • The re-financing of debt attributable to commercial property assets
  • The development of new properties underpinned by strong lease cash flows
  • The financing of listed property loan stock companies
  • The financing of non-listed property companies that have a diversified underlying portfolio

This business unit manages interest rate risk and trades and hedges interest rate risk within SCM and on behalf of the Sanlam Group and specific clients. The unit also utilises credit derivatives to repackage and distribute products to the Sanlam Group and to the market.

The Equity Unit’s main objective is to provide, equity-linked finance and structuring skills to South African corporates, BEE companies, Hedge Funds and Ultra High Net-Worth individuals. We primarily focus on the structuring and financing activities with equity instruments as underlying collateral.

These activities are supported by:

  • Execution of JSE listed instruments (shares, ETF’s/ETN’s and futures) through Sanlam Securities
  • Collateralised lending
  • Synthetic products, including futures; CFD’s and swaps
  • Scrip lending

The unit also provides hedge products for company share schemes and other clients requiring equity derivative solutions.

On a selective basis the unit may enter into underwriting transactions on listed shares.

Sanlam Prime Services (SPS) is a wholly owned subsidiary of SCM. SPS business is predominantly an agency scrip lending business.

Treasury sources funding from the market, including a Commercial Paper program, for use within the Sanlam Group, predominantly managed by SCM.

SGT and MMBU fall under the Finance Department and:

  • provide asset funding and liquidity via the SCM Note Programme for all businesses within SCM and within the Sanlam group on a centralised basis. MMBU manages the SCM Note Programme for SCM and Sanlam under the Sanlam centralised group treasury;
  • manage SCM’s overall liquidity risk;
  • trade actively in the short-term and medium-term interest rate product markets;
  • take advantage of arbitrage opportunities between the money market, the carry market and the capital market as well as the derivative market, where applicable.

About

Black Economic Empowerment

SCM has a strong commitment to transformation and broad-based black economic empowerment (BEE) which is in line with the requirements of the Financial Sector Charter (FSC) published in terms of the Broad-based Black Economic Empowerment Act 2003, SCM’s approach to BEE is multi-pronged and founded on the following pillars:

Ownership and Control

SCM is indirectly a wholly owned subsidiary of Sanlam Limited, a listed entity which provides through its subsidiaries insurance and financial engineering solutions to its clients. During 2004, Sanlam announced a significant empowerment transaction with Ubuntu-Botho Investments Limited. For Sanlam and SCM, this transaction represents a firm commitment to meaningful transformation. It represents the opportunity to grow its business to broader foundations, to service new and growing markets and to harness the full economic power of South Africa’s diverse society. Furthermore, it enables both Sanlam and SCM to attract, develop and retain the best talent in the industry and positions them as a leading empowered financial services group in South Africa.

Management Strategy

SCM’s vision is to be an indispensable high performance financial engineering business. To achieve this vision, SCM’s key business drivers are:

  • high quality financial engineering expertise;
  • an ethical and respectful company culture;
  • a company with open communication;
  • concentrating on businesses providing high risk adjusted returns; and
  • contributing significantly to Sanlam as a whole.

Legal

The Promotion of Access to Information Act (PAIA)

The Promotion of Access to Information Act (PAIA), 2 of 2000 gives you the right to access information that you might require for the exercise or protection of any rights. Once you've met certain requirements, you'll be granted access to the information you require. The Act also requires private bodies (e.g. Sanlam) to compile a manual which will assist people who want to exercise their right to access to information.

Should you want to exercise your right of access to information, you can download the Manual below, as well as the prescribed form and fees you need to pay.

Sanlam Capital Markets Manual Download PDF
Sanlam Capital Market Form to be completed Download PDF

Disclaimer

Sanlam Capital Markets Proprietary Limited (SCM) is an Authorised Financial Services Provider. SCM hereby disclaims certain liabilities. Sanlam Capital Markets Proprietary Limited (SCM) does not accept any liability for damage caused by any virus or other malware which may be transmitted by the email.
For full Disclaimer see: Email Terms of Use.

Contact Us

Physical address:
Building 2
11 Alice Lane
Sandton
2196
South Africa

Postal address :
P O Box 411420
Craighall
2024
South Africa

Telephone : +27(11)778 6000
Fax: +27(11)778 6933

Marketing and Communications:
Michelle Marais
Tel:+27 (11) 778 6260
Fax: +27 (11)778 6933
E-mail: michellem@sanlaminvestments.com

Sanlam Life Insurance is a licensed financial service provider.
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