PIC eyes Barclays Africa black consortium

Pedestrians pass a logo outside the offices of Barclays Plc in Johannesburg, South Africa, on Thursday, Dec. 12, 2013. Inflation in Africa's biggest economy slowed for a third month in November, staying within the Reserve Bank's 3 percent to 6 percent target range and relieving pressure on Governor Gill Marcus to start raising interest rates early next year. Photographer: Dean Hutton/Bloomberg©Bloomberg

Barclays Africa is one of the big four banks that dominate South Africa’s financial sector

The Public Investment Corporation, South Africa’s powerful state-owned pension fund manager, is considering putting together a consortium of black investors to take a controlling stake in Barclays Africa.

Dan Matjila, chief executive of PIC, which has about $ 117bn under management, told the Financial Times that the decision by Barclays to sell its Johannesburg-based African subsidiary provided the “best opportunity for us to create a black-controlled bank”.

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“I don’t want to go public on the details, but the idea should be black investors clubbing together to buy a reasonable share and we will be part of that to create the first black controlled bank,” he said.

“That would be most desirable — we are not there yet.”

PIC is already a leading shareholder in Barclays Africa. It increased its stake to 7.3 per cent when it snapped up a tenth of the shares sold in an accelerated bookbuilding earlier this month. That reduced Barclays’ stake in its African business from 62 per cent to slightly more than 50 per cent.

Barclays Africa is one of the big four banks that dominate South Africa’s financial sector. There has been a perception that a “black-controlled” bank would better serve the country’s black majority population and help address some of the economic imbalances created under apartheid.

Patrice Motsepe, South Africa’s first black billionaire, has also expressed an interest in acquiring a stake in Barclays Africa, according to two bankers involved in talks for him to lead a consortium of investors.

Mr Motsepe made his fortune in mining, but last month launched African Rainbow Capital, with the aim of focusing “on financial services and private equity in South Africa within a pan- African context”.

ARC has not commented on the speculation, and Mr Matjila declined to give details of who might be involved in a consortium. However, he said he had spoken to Bob Diamond, Barclays’ former chief executive, whose Altas Merchant Capital venture has teamed up with US private equity group, Carlyle, as part of another consortium keen to buy the Africa subsidiary.

Mr Matjila said Mr Diamond would have to secure exclusive talks with Barclays to have more formal discussions, but did not rule out working with him.

“If Barclays is prepared to sell to Diamond, we have to assess if he’s a good partner as well,” Mr Matjila said. “It will be good to have also offshore money coming in because this is not a small stake.”

The PIC, which manages funds on behalf of the Government Employees Pension Fund, owns the equivalent of about 12 per cent of the market capitalisation of the Johannesburg Stock Exchange, but rarely takes controlling stakes in companies.

However, there is an increasing push by the government to create black industrialists and support the development of black businesses, with the corporate sector still dominated by the white minority.

Mr Matjila said the PIC could look to use an investment in Barclays Africa to advance black economic empowerment (BEE) by offering shares in the bank to the 1.2m members of GEPF through a special investment vehicle.

“If you talk BEE, that is the angle that we are going to look at — to allow them to participate in this structure as shareholders,” he said. “With a retail offer directed towards the members of the GEPF, and then we will finance it with their money one way or the other.”

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