Citadel incubates a black wealth management company
Since 1994, there has been a significant increase in net emerging wealth in South Africa, as evidenced by the ANC’s recent claim that black middle class has grown from approximately 1.7 million people to 6 million people over the past 24 years. Despite this, there remains a dearth of wealth management companies that reinvest back into the economy for the specific purpose of building the emerging market segment, says Citadel Chief Executive Officer Andrew Möller.
With 25 years expertise in wealth management in South Africa, Citadel has been consistently committed to the creation of an inclusive, sustainable economy through taking the concept of wealth management to a broad spectrum of society while also boosting black wealth creation.
It is with this in mind that Citadel first began incubating the development of BayHill Capital, the specialist private client share portfolio company, in 2016, he explains.
“At Citadel we maintain that it is imperative that every individual regardless of income has access to wealth management services in order to create a successful society and vibrant economy. We therefore believed that BayHill Capital could contribute significantly to the advancement of South Africa by broadening the scope of financial solutions available in the market to include transformational investments.”
As a transformational wealth manager, BayHill Capital aims to create change in the economy by investing black savings in targeted investments that also offer competitive returns. BayHill’s suite of investment portfolios are therefore aimed at both earning good returns for investors and driving economic transformation using emerging capital.
“However, we knew that establishing a wealth management company can be a costly and lengthy exercise. We short-circuited this by opening up the operational backbone of Citadel’s business – the back office, the structure and support – to BayHill Capital as a mechanism to ensure the success of the new entity. This forms the bedrock on which Citadel itself rests, and we saw this as crucial to the success of the new company.”
Citadel Advisory Partner Christelle Louw was also appointed as a Director and board member of BayHill Capital in July 2017. She brings a wealth of financial planning and advice knowledge to the BayHill leadership team and demonstrates Citadel’s commitment to making this transformative undertaking successful, he notes.
Citadel Holdings then concluded a Broad-Based Black Economic Empowerment (B-BBEE) transaction in April 2017 whereby they funded the acquisition of a 51% controlling stake in BayHill to African Financial Group Wealth (AFG) and retained a 49% stake in the business, leveraging AFG’s mutual interest in transformation and the creation of black wealth to ensure BayHill’s continued success.
BayHill Capital portfolios consequently also offer companies the potential to achieve the ownership scorecard targets of the B-BBEE Act.
Citadel Head of Marketing Nandipha Solomon comments, “Through continuing to make Citadel’s infrastructure and insight available to BayHill Capital as well as fostering skills transfer, we are proud to have engendered a new and sustainable wealth manager, and to contribute towards the creation of larger pools of black capital.”
“Citadel is pleased to support BayHill Capital, recognising the key role that financial institutions can play in transforming the economy. We remain committed to supporting innovations that open the benefits of wealth management services to all, and to playing an active role in helping South Africans to achieve a better financial future.”
A member of the Peregrine Group, Citadel Investment Services Proprietary Limited is licensed as a financial services provider in terms of the Financial Advisory and Intermediary Services Act, 2002.
Kindly note that this article does not constitute financial advice. All information and opinions provided are of a general nature and are not intended to address the circumstances of any individual.
Citadel is a specialist wealth manager with over 20 years’ experience in providing bespoke solutions for high net worth individuals. Through character-rich engagement and building strong relationships based on mutual respect and trust, Citadel enables its clients to explore the true potential of their hard-earned money. The best fiduciary, risk and asset management expertise is used to strategise, implement and manage a financial roadmap for its clients and their family. Visit www.citadel.co.za for more information. @Citadel SA