Self-made South African billionaire Allan Gray and his family have given away to charity their entire controlling stake of the Allan Gray investment company and its offshore partner Orbis, BusinessDayLive reported.
It’s an unprecedented move for a South African investment company, according to Bloomberg.
This donation puts Gray in the company of U.S. philanthropists Warren Buffett and Bill Gates, who five years ago started Giving Pledge, which encourages billionaires to give the majority of their wealth to philanthropic causes, according to a CNBC report.
The richest black South African, Patrice Motsepe, chairman of African Rainbow Minerals Ltd., also promised some of his wealth to charity in 2013.
Gray’s donation ends more than 40 years of family control of Allan Gray and will see current equity value — estimated at billions of rand — going to the newly formed Allan and Gill Gray Foundation for philanthropic endeavors.
Dividends from the firm will be used for exclusively for philanthropic purposes, Gray said in a newsletter to clients dated Dec. 31.
“The controlling interests (and almost all of the family’s interests) have already been transferred to the foundation,” Allan Gray chairman Ian Liddle said Thursday.
Gray, 78, is a self-made billionaire who got rich from his investments, according to Forbes, which ranks him as the seventh-richest South African.
A South African citizen and resident of Hamilton, Bermuda, Gray is fiercely private, Forbes reported. He founded his investment management firm in Cape Town in 1973 and built it into the largest privately owned asset manager in South Africa, overseeing $40 billion in assets.
The company was South Africa’s fourth-largest money manager in 2014, according to a survey of retirement funds by Alexander Forbes Group Holdings Ltd., Bloomberg reported.
Gray earned his MBA from Harvard and spent eight years at Fidelity Fund Management in the U.S. before starting the company. In 1989 he launched another asset manager — Orbis Investment Management — in Bermuda, which managed $30 billion.
In 2005, Gray founded the Allan Gray Orbis Foundation with $130 million of his own funds providing fellowship grants to emerging business leaders. The foundation received 7 percent of the taxed profits of Allan Gray Ltd., Forbes reported.
The family will have no remaining economic interest in the firms, Allan Gray chairman Liddle said, according to BusinessDayLive.
Dividends from the asset management firm will be used for philanthropic purposes.
“If we continue to do a good job for our clients and retain their trust and confidence, we hope that the annual dividends will run to the hundreds of millions of rands,” Liddle said in a phone interview with Bloomberg. Gray “wants our businesses to continue to thrive and he thinks that this is a governance structure which will allow our businesses to continue to thrive.”
According to its charter, the foundation must devote all of the dividends it receives entirely to philanthropic purposes.
“We consider this both the right thing to do and a small but necessary contribution toward a society full of hope for all humanity,” Gray said.
Source: AFK Insider