US consulting firm expands in SA

4 December 2007

US-based multinational consulting firm Watson Wyatt is to form a strategic alliance with and acquire an initial 20% stake in South African actuarial and employee benefits consultancy Fifth Quadrant.

“We are pleased to enter the South Africa market,” Watson Wyatt chief executive John Haley said in a statement on Monday. “Fifth Quadrant is an excellent strategic fit and shares Watson Wyatt’s focus on high-quality client service.”

Fifth Quadrant’s core business is the provision of independent advice to institutional clients in the areas of actuarial services, retirement fund consulting, investment consulting and health benefit consulting.

It is wholly owned by its executive and non-executive directors, with the executive management team owning over 98% of the business.

“We see tremendous growth opportunities in the coming years, not just in South Africa but across the whole continent,” Watson Wyatt regional manager Babloo Ramamurthy said. “This is an exciting opportunity as it further enhances our ability to offer seamless consulting services around the world to our multinational clients.”

With offices in Johannesburg and Cape Town, Fifth Quadrant employs 72 staff, including 15 actuaries. The firm has revenues of R78-million and is the leading asset consulting firm in South Africa (advising 36 of the largest 100 funds by asset size).

The strategic alliance with Fifth Quadrant follows on from Watson Wyatt’s recent announcement that it is opening an office in Dubai, its first on-the-ground presence in the Middle East.

Both firms have signed a letter of intent and aim to sign a definitive agreement by the end of December, subject to obtaining the necessary regulatory consents.

Earlier this year Arlington, Virginia-based Watson Wyatt acquired Heissmann, Germany’s premier firm of actuarial, benefits and human resources consultants, Watson Wyatt Brans & Co, its long-time alliance partner in the Netherlands, and Oakbridge Consulting Group, a human resources consulting firm in Sweden.

“Becoming part of Watson Wyatt Worldwide will provide the international credentials increasingly expected by global companies with operations in southern Africa and allow us to advise local South African firms on global best practice,” Fifth Quadrant executive chairman Rustum Omar said.

“It will significantly enhance the service we provide to clients and is likely to create some fantastic opportunities for our staff.”

SAinfo reporter

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