Sanlam to merge Principal and Merchant Securities

South African insurer Sanlam is merging stockbrokers and private client managers Merchant Securities with Principal Investment Management and bringing them under the Sanlam Private Investments brand, New Model Adviser® understands.

Craig Massey, director of stock broking and portfolio management for Sanlam Private Investments in South Africa, is to relocate to the UK to head up the combined group.

A source familiar with the situation said the merger of Merchant Securities with discretionary fund managers Principal would lead to Sanlam targeting high-end clients with more than £500,000 to invest.

Another source said that staff were set to be informed of the changes, which are understood to involve redundancies, over the weekend.

‘Most of the operational changes have largely been implemented,’ the source said. ‘At the moment it’s a co-operation rather than a merger but the long-term desire is to merge the two subsidiaries.’

Daniël Kriel (pictured), chief executive of Sanlam Private Investments, is sitting on a new board that will oversee the group.

He would not be drawn on the plans but said: ‘Over the last three and a half months, we have been working with Principal and Merchant Securities, with the view to refocus and re-energise the business.’

The move follows redundancies at Principal last month. Sanlam took a stake in Merchant Securities and took over Principal in 2011 and 2008 respectively.