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STANLIB Limited

STANLIB Limited. Acquisition by a BEE consortium of 25,2% 18 June 2003. STANLIB – company profile. Asset and wealth management group Created in 2002 Combined Liberty and Standard Bank asset management unit trusts linked product businesses. STANLIB organisational structure.

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STANLIB Limited

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  1. STANLIB Limited Acquisition by a BEE consortium of 25,2% 18 June 2003

  2. STANLIB – company profile • Asset and wealth management group • Created in 2002 • Combined Liberty and Standard Bank • asset management • unit trusts • linked product businesses

  3. STANLIB organisational structure Standard Bank Group Liberty Group 50% 50% STANLIB Limited 100% 100% STANLIB Asset Management STANLIB Wealth Management “Product / marketing / distribution arm” “The factory”

  4. STANLIB Asset Management AUM 31 December 2002 R’billion Life funds 53,6 Segregated funds 43,5 Unit trusts 30,2 Africa 1,1 TOTAL AUM 128,4

  5. STANLIB Wealth Management FUA 31 December 2002 R’billion Single manager unit trusts 28,8 Structured products 10,4 Linked products 7,9 Other 4,8 TOTAL FUA 51,9

  6. Value and fairness opinion • STANLIB valued at R1,4 billion for purposes of the transaction • Independent fair and reasonable opinion given by Deutsche Securities as to Liberty’s sale price for 12,6% of STANLIB

  7. STANLIB’s equity value has declined since its formation (from R1,8 billion to R1,4 billion) • Relatively poor-performing equity markets have resulted in: • a decline in the ratings of asset managers; • a decline in assets under management; and • a decline in operating earnings JSE ALL SHARE INDEX & PE RATIO 12,000 20 10,000 18 8,000 16 Index 6,000 14 PE Ratio (times) 4,000 12 2,000 10 8 0 Jan-00 Jan-01 Jan-02 Jan-03 JSE All Share Index JSE All Share Index PE ratio

  8. Multiples STANLIB ASSETS UNDER MANAGEMENT AND FUM MULTIPLE % 220,000 1,4 1,2 1,19% 170,000 1,0 0,98% 1,00% 0,92% 120,000 0,81% FUM (R'millions) FUM multiple (%) 0,8 0,78% 0,6 70,000 0,4 20,000 0,2 31-Dec-00 31-Dec-01 31-Dec-02 31-Mar-03 31-Dec-03 Actual Actual Actual Actual Forecast STANLIB Wealth Management Funds Under Administration Equity value / FUM (excl. unit trusts in WM) STANLIB Asset Management Assets Under Management Equity value / total FUM

  9. Rationale for transaction • National and business imperative to introduce empowerment partnership • Liberty and Standard Bank actively involved in the process of transformation in South Africa • Establishment of an empowerment partnership with the goal, inter alia, to support South Africa’s socio-economic objectives

  10. Benefits • Maintenance of current PIC and other asset management mandates • Increased fund inflows demarcated specifically for empowered asset managers • Future business opportunities including expansion into Africa

  11. Consortium • Safika (51%) • Investment holding company which facilitates greater black economic participation in South Africa • Directors include Saki Macozoma, Moss Ngoasheng and Vuli Cuba • BBET (35%) • Created for the benefit of organisations representing broad-based communities from historically disadvantaged backgrounds

  12. Consortium, continued • Nduna Trust (9%) • Personal trust of Ronnie Ntuli who: • Is a respected advisor to South African and international corporates and investors • Immediate past President of the Johannesburg Metropolitan Chamber of Commerce and Industry • Recently appointed CEO of Andisa Capital

  13. Consortium, continued • Simeka (5%) • Investment holding company which provides management consulting, capacity building, employee benefits solutions, communications and marketing services to the Government, public sector and international agencies

  14. Transaction • Newco will be owned 51% by Safika and 49% by the remainder of the Consortium • Newco will acquire 25,2% of STANLIB, 12,6% from each of Standard Bank Group and Liberty Group • Newco is incentivised to introduce new mandates

  15. Safika BBET Nduna Simeka 51% 35% 9% 5% Newco StandardBank* Liberty Group* 25,2% 37,4% (50%) 37,4% (50%) STANLIB 100% 100% STANLIBAsset Management STANLIBWealth Management * Listed on the JSE Securities Exchange South Africa ( ) Denotes current shareholdings in STANLIB Proposed future structure

  16. Dividend policy • 100% of profit after taxation per annum, subject to working capital and capital expenditure requirements, while the BEE funding is outstanding • Thereafter subject to STANLIB board’s discretion, subject to a mimimum of 50% of profits available for distribution

  17. Composition of the Board • The Chairman will be Saki Macozoma, who will make himself available to be appointed as the Chairman of STANLIB for a mimimum of three years • STANLIB board will consist of maximum 16 directors • The Consortium will have the right to appoint one executive director

  18. Composition of Board, continued • Nominations pro rata to shareholding at the time, subject to a minimum of 10% shareholding required to appoint the first director • Newco entitled to appoint Chairman of STANLIB, subject to Standard Bank and Liberty approval • Liberty entitled to appoint CEO of Asset Management • Standard Bank entitled to appoint CEO of Wealth Management

  19. Exclusivity • Newco will be the exclusive empowerment partner of STANLIB in Africa (subject to commercial necessity) • In return, Newco and all of its shareholders have undertaken to restrict their investment in asset management and wealth management in Africa to STANLIB

  20. In summary • We remain proactive in developing the empowerment credentials of Standard Bank Group and Liberty Group • STANLIB empowerment structure now introduced • Andisa Capital was launched recently • More on the horizon…

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