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Should investment integration headaches scupper a takeover?

by Danielle Levy on Mar 13, 2014 at 12:14


His sentiments are echoed by Sanlam Private Investments’ (SPI) CIO Richard Champion, who said in his experience, deals had not been done as a result of the underlying investment process of a target.

‘I can think of an example where there was a particular style of investment sold to the client base. Although the principals in the business were keen to do the deal, one of the things we felt was that clients had been sold something that was too distinct from what we offered.’

With this in mind, SPI makes sure a target has sufficient buy-in to its centralised proposition from the outset. ‘Otherwise you can end up in endless battles,’ Champion said. ‘As the acquirer you need to be careful in your due diligence that the buyer accepts the centralised proposition. We have plenty of leeway within our system, which is necessary as clients are different.’

The firm runs a centralised process with recommended buy lists and senior managers are given autonomy to then build portfolios according to client objectives.

‘From our perspective I should stress that one of the good things about buying businesses is keeping an open mind. You can pick up positive things from the businesses you buy, for example the asset classes they are looking at or the way they communicate with clients,’ he said.

‘Ultimately, you need to have an overriding discipline. You can’t run three to four investment processes within one business. It is not cost-effective in this world.’

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