Few people can say it was the mining industry that drove them into financial services but for Sanlam UK chief executive Lukas van der Walt it was the world of smelting, refining and digging that helped him decide to move over to the world of finance.
“Mining firms hold high regard for financial people. Also, given my skills and abilities, I thought financial services would be a place where I could have a bigger say and sway in terms of what happens,” he says.
Van der Walt spent the first part of his career in the corporate world of mining finance. With stints in the UK, Brazil, South Africa and the Netherlands, he worked very closely with powerful businesspeople, including Marius Kloppers, the chief executive of BHP Billiton who was recently rated as the 18th most powerful corporate executive in the world.
“I very quickly realised Marius was a lot more talented and hard-working than me. He is an exceptional individual.”
But Van der Walt saw opportunity in the booming South African financial services sector of the late 1990s and moved to Sanlam, one of the country’s most established financial services firms.
He says the two worlds are not so different. “Mining and financial services are very different industries but both are based on value for money. When it comes to retail distribution, you have to be client-centric with a proposition that works for clients and that is the same for mining.”
He also says there is a lot of similarity between planning mega commodity deals and smaller retail financial deals. “Mining is very capital-intensive if you get the capital wrong on a big mining, smelting or refinery project you will never make money but then at the same time, if you get the capital wrong when putting together a wrap business you are not going to make money either.”
It is deal-making that has brought Van der Walt to the UK. After a spell working on acquisitions and joint ventures for Sanlam in Cape Town, he helped put together Sanlam’s acquisition of UK firm Merchant Investors and moved here to help build the firm’s UK presence.
“We have ended up in a position where we are today with an attractive portfolio with a comprehensive offering. Our focus in terms of growth is to create a customer-centric retail services business in the UK and growing distribution activity to enhance the quality of the offerings.”
Since his arrival, Van der Walt has managed a number of partnerships and acquisitions in the financial services sector. As well as Merchant Investors, the firm now owns stakes in Intrinsic, Nucleus and Punter Southall as well as acquiring private client firm Principal and most recently a stake in IFA firm Buckles.
“As a group, we have realised we are not over-endowed with management talent and we have to partner with people but I think that we have proved that you can partner with management teams successfully.”
The impending big changes looming in the retail distribution sector are not a deterrent for Sanlam’s growth plans and Van der Walt says if anything they are a bonus for a firm looking to invest in the sector. “Our business model in the UK is based in the fact that there will be a shift in value to the client and the distributor. We do not want to perpetuate the business models of a provider, we think the opportunity is to assist the IFA community and to deliver value to clients.”
In terms of targets in the business after the RDR, Van der Walt is confident that investment in both independent and tied advice is key to success. “No one knows to what extent the market will polarise between independent and restricted but, from a shareholder perspective, investing in different distribution models is prudent and wise, as well as making sure the management team is in place to adapt the existing model in terms of how the market develops.”
He also considers that technology is central in the future of retail distribution and says the firm is looking to grow the Nucleus business and will also be offering an authorised corporate director proposition for IFAs looking to create their own Oeics.
“We think there is a very big opportunity for wrap platforms. If we want to partner with an IFA and if we set up a distributor-influenced fund for the firm, we have to offer wrap-like functionality.”
He also makes no secret of Sanlam’s desire to continue to expand in the UK. “The first and foremost goal is to make real progress in distribution. We need to build relationships and demonstrate we can partner but we will be selective.”
A central part of this expansion is the acquisition of businesses from older IFAs leaving the industry and Van der Walt says the business is keen to use the experience of Sanlam new head of distribution Nigel Speirs.
Speirs is chief executive of Buckles Investment Services and Van der Walt says Sanlam chose Buckles because of its training programme and appetite to take on business from older IFAs leaving the sector.
Van der Walt says: “If you want to buy the IFA’s business, he or she is going to retire but they are going to still live in that community and will still see their clients. You have to provide a good home to his or her clients, so we have to make sure our offering is doing just that.”
Born: Johannesburg, 1960
Education: Commerce degree, Rand Afrikaans University; accounting degree, Unisa; chartered accountant.
Career: 2008-present: chief executive, Sanlam UK;
2004-08: chief executive, Merchant Investors; 1999-2004: chief operating officer, Sanlam International; 1994-99; finance director, BHP Billiton Aluminium; 1991-94 : corporate finance division, Kleinwort Benson; 1985-91: corporate finance manager, Gencor
Likes: People that achieve
Dislikes: People that complain
Drives: BMW 530 diesel
Book: Shantaram by Gregory David Roberts
Film: I really like the new Invictus film
Album: Anything by 10cc
Career Ambition: To grow and establish a successful business in the UK
Life Ambition: For my kids to appreciate me when they are 18
If I wasn’t doing this I would be…A cricket umpire