Momentum Corporate, a leading provider of employee benefits and retirement services in South Africa, has acquired Verso, a financial services group with 26 years of experience. The acquisition aims to strengthen Momentum Corporate's retirement fund administration and consulting capabilities. Verso specializes in retirement fund administration, employee benefits consulting, healthcare broking, and wealth management. This strategic move is expected to enhance Momentum Corporate's employee benefits offering and support its long-term growth strategy.
The acquisition brings Verso's expertise and experienced team into Momentum Corporate, allowing the company to expand its offering to clients. According to Dumo Mbethe, CEO at Momentum Corporate, Verso has built a strong reputation through its specialist expertise and longstanding client relationships. Mbethe added that Verso's strengths can be leveraged to further develop the offering available to clients. During the transition period, Verso will continue serving its existing clients, and current service arrangements will remain in place.
The retirement fund administration industry in South Africa is highly competitive, with major players such as Alexforbes, Liberty, Old Mutual, and Sanlam vying for market share. Momentum Corporate delivers one of the market's largest and most established umbrella fund solutions, supported by digital capabilities that enhance the experience for employers and members. The company is prioritizing ecosystem modernization as a critical enabler of its growth strategy.
Momentum Corporate's parent company, Momentum Group, reported strong earnings of R7bn, a year ahead of its 2027 target. The group, which houses brands such as Metropolitan and Multiply, saw five of its nine business units report more than R1bn in earnings in the year under review. Momentum Corporate itself reported normalised headline earnings of R1.4bn, a 12% drop from a year earlier. However, sales volumes surged 38% to R16.2bn, driven by robust new business volumes in the long-term savings business.
The acquisition of Verso is part of Momentum Corporate's strategy to enhance its digital transformation and improve client experience. The company is advancing digital transformation by accelerating digital self-service, automation, adviser enablement, and AI-driven productivity. This has resulted in over 40,000 hours in efficiency savings and enabled 66% of service transactions to be self-serviced. The company is also enhancing the adviser experience through its Smart Quotes and Adviser Connect platforms.
Momentum Group has also taken steps to retain its executives for longer by increasing its retirement age from 60 to 63. This move follows similar decisions by Nedbank and Standard Bank over the last year, as South African corporates increasingly question whether their retirement ages are still fit for purpose. The group, headed by Jeanette Marais, aims to address skills shortages in executive roles and the war for talent in the sector.
The integration of Verso into Momentum Corporate is expected to create further opportunities to support the evolving needs of clients. The acquisition allows Momentum Corporate to build on Verso's foundation and leverage its expertise to drive growth. With its enhanced capabilities, Momentum Corporate is well-positioned to navigate the competitive retirement fund administration industry in South Africa.
Key points
- Momentum Corporate acquires Verso to strengthen its retirement fund administration and consulting capabilities.
- The acquisition aims to enhance Momentum Corporate's employee benefits offering and support its long-term growth strategy.
- Momentum Group has increased its retirement age from 60 to 63 to retain executives for longer.
