Actis eyes Alex Forbes exit after $1bn float

The firm has already made a partial exit following South Africa's biggest IPO for four years

Emerging markets investor Actis has sold a substantial portion of its stake in African financial services business Alexander Forbes, after the company returned to the Johannesburg Stock Exchange on Thursday.

Actis led an 8.2 billion rand ($779 million; €579 million at today's exchange rates) take-private of the business in 2007 by a consortium of investors, which also included Ethos Private Equity.

The investor group took a combined stake of 54 percent in the business. Actis accounted for about 13 percent of that, of which it has now sold around 9 percent. At the offer price of 7.50 rand per share, this would have been worth about 879 million rand ($83.4 million; €62.0 million).

In addition to the Johannesburg listing, Mercer Africa, a subsidiary of insurance broker Marsh & McLennan, is buying an initial 14.9 percent stake in Alexander Forbes. Mercer hopes to increase this stake to 34 percent, subject to regulatory approval – at which point the investor group will make a full exit from the business.

Alexander Forbes is a South Africa-based financial services business, providing retirement fund administration and insurance products to countries in Africa and beyond.

In a statement today, Actis said that during its ownership of the business, it had helped the company to transform its corporate governance, reshape its senior management team, address reputational issues and drive EBITDA improvement through the disposal of non-core units. “We have achieved a tremendous shift in the business, one that epitomises our investment philosophy of our capital being more than soltely financial,” partner Natalie Kolbe said.

Actis, which is led by executive chairman Paul Fletcher, could not be reached for further comment at press time.

The Alexander Forbes offering priced in the middle of its range last Friday, raising 3.7 billion rand and valuing the company at 9.7 billion rand. According to Reuters, that makes it the biggest listing seen in Africa since Nigerian oil and gas company Seplat floated in April, and the biggest in South Africa since Royal Bafokeng Platinum in 2010.

Its shares have performed strongly since trading began yesterday: at 1100 GMT this morning, the stock was trading at 8.49 rand, up 13 percent and valuing the business at 11.1 billion rand ($1.05 billion, €782 million).