Major South African Asset Manager Advances Economic Transformation with Landmark Empowerment Partnership

Johannesburg, October 8, 2025 — In a move that underscores the evolving landscape of South African finance, 36ONE Asset Management has finalized a significant Black Economic Empowerment (BEE) transaction, granting a consortium led by MI Capital a 22% equity stake in the prominent investment firm. The deal arrives at a moment of intense national debate over the future of empowerment policies, with critics and supporters offering sharply contrasting visions for economic transformation in Africa’s most industrialized nation.

The transaction, which involves MI Capital—the investment arm of the Maharishi Invincibility Institute (MII)—alongside 36ONE staff members and youth communities represented through The Invincible Empowerment Trust, represents one of the most substantial empowerment deals in South Africa’s asset management sector this year. It positions 36ONE not merely as a financial services provider but as an active participant in addressing the country’s persistent economic inequalities through direct ownership transformation.

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36ONE’s Journey to Industry Leadership

Since its establishment in 2004 by founders Cy Jacobs and Steven Liptz, 36ONE has evolved from a boutique investment operation into one of South Africa’s preeminent asset management companies, currently overseeing assets exceeding R60 billion (approximately $3.2 billion). The firm has built its reputation on sophisticated investment strategies, rigorous risk management, and consistent performance across diverse market conditions that have tested many of its competitors.

The company’s growth trajectory mirrors South Africa’s financial sector expansion over the past two decades, a period marked by increasing sophistication, regulatory development, and growing integration with global capital markets. Throughout this evolution, 36ONE has maintained its position as a privately held firm, allowing founders and management to pursue long-term strategies without the quarterly pressures that often constrain publicly traded competitors.

The decision to pursue this particular BEE structure reflects 36ONE’s strategic vision for sustainable growth in an environment where transformation credentials increasingly influence institutional investment mandates and government procurement opportunities. Major pension funds, public sector entities, and corporate clients have progressively incorporated BEE compliance into their investment manager selection criteria, making transformation not merely a social imperative but also a commercial necessity.

The Maharishi Invincibility Institute’s Educational Mission

The Maharishi Invincibility Institute has emerged as a distinctive force in South African education and skills development since its inception. Operating as a free-access educational center in Johannesburg, MII has supported more than 25,000 South Africans in securing meaningful employment, contributing an estimated R80 billion to the national economy through the enhanced earning capacity of its graduates.

Unlike traditional educational institutions that charge substantial fees, MII’s model focuses on removing financial barriers to quality education for talented individuals from disadvantaged backgrounds. The institute offers comprehensive programs spanning information technology, business management, entrepreneurship, and professional skills development—disciplines directly aligned with the modern economy’s demands.

MI Capital, the institute’s investment arm, manages a substantial bursary fund designed to provide sustained access to world-class education, career opportunities, and entrepreneurial pathways for more than 100,000 young people over the coming years. The investment vehicle applies market-based principles to social development, generating returns that fund educational expansion while simultaneously building an ownership stake in productive enterprises.

This dual-purpose model addresses a critical challenge in South African development: how to create sustainable funding mechanisms for social programs without perpetual dependence on philanthropy or government budgets. By acquiring equity stakes in successful businesses like 36ONE, MI Capital secures long-term revenue streams that support educational access for successive generations.

Structure and Governance of the Empowerment Deal

The BEE transaction’s architecture reflects careful attention to ensuring that ownership translates into meaningful participation rather than symbolic representation. The consortium’s 22% stake provides substantial influence over strategic direction while allowing the founding management team to retain majority control and operational leadership.

The Invincible Empowerment Trust, which represents youth communities affiliated with MII, holds a significant portion of the consortium’s stake, creating a direct connection between 36ONE’s financial performance and educational opportunities for young South Africans. This structure ensures that the benefits of ownership flow to beneficiaries with limited existing access to capital and economic participation.

36ONE staff members’ inclusion in the consortium addresses another critical dimension of empowerment: ensuring that value creation benefits those who directly contribute to the firm’s success. Employee ownership has proven effective in aligning incentives, enhancing retention, and fostering a culture of entrepreneurship within organizations across various sectors.

“This partnership is more than a financial transaction,” Cy Jacobs emphasized in announcing the deal. “It reflects our belief that investing in human potential is as important as financial growth. By working with MII, we are helping to shape the next generation of leaders, entrepreneurs, and professionals in South Africa.”

The governance framework established under the agreement embeds empowerment considerations directly into 36ONE’s strategic planning processes. Consortium representatives will participate in key decision-making forums, ensuring that social impact considerations receive attention alongside traditional financial metrics in evaluating the company’s direction and performance.

MII’s Vision for Expanded Impact

Dr. Taddy Blecher, CEO and co-founder of the Maharishi Invincibility Institute, articulated an expansive vision for how the partnership would accelerate MII’s educational mission. “36ONE’s support allows us to expand our educational programs, provide more jobs, and foster entrepreneurship,” Blecher explained. “This partnership creates tangible empowerment opportunities for youth who have historically been disadvantaged.”

The financial resources and expertise that flow from the 36ONE partnership enable MII to scale proven educational models, develop new program offerings addressing emerging skills gaps, and extend its reach to additional communities across South Africa. The collaboration also provides MII students with potential internship and employment opportunities within the financial services sector, creating concrete career pathways that translate education into economic advancement.

MII’s approach represents a departure from traditional educational charity models that often struggle with sustainability and scalability. By building an investment portfolio through vehicles like MI Capital, the institute creates perpetual funding mechanisms capable of supporting educational access independent of donor sentiment or economic cycles that constrain conventional philanthropy.

The Intensifying BEE Controversy

The 36ONE transaction unfolds against the backdrop of increasingly polarized debate over South Africa’s BEE policies, which have governed economic transformation efforts since the early years of democracy. Recent months have witnessed particularly sharp exchanges between defenders and critics of the empowerment framework, with high-profile voices on both sides intensifying their rhetoric.

Billionaire entrepreneur Elon Musk, who spent his formative years in South Africa before emigrating, has emerged as one of the most prominent critics of BEE policies. Musk has publicly characterized the legislation as “racist” and argued that such policies deter foreign investment critical to economic growth. In various social media posts and interviews, he has called BEE a “disgrace” to Nelson Mandela’s legacy, asserting that the anti-apartheid icon would have rejected racial classification as a basis for economic policy.

Musk’s criticisms resonate with a broader constituency of business leaders, international investors, and political figures who contend that BEE has created inefficiencies, prioritized racial metrics over competence, and benefited a narrow elite of politically connected individuals rather than achieving broad-based transformation. These critics point to persistent poverty, unemployment exceeding 30%, and limited upward mobility for the majority of black South Africans as evidence that BEE has failed to deliver on its promises.

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Political Opposition to Empowerment Policies

The Democratic Alliance (DA), South Africa’s official opposition party and the second-largest political formation, has positioned itself as a leading critic of existing BEE frameworks. The party argues that current policies have deterred investment, stifled economic growth, and primarily benefited a select group of well-connected individuals rather than creating broad-based opportunity.

The DA advocates for an alternative empowerment model focused on job creation, skills development, and poverty alleviation rather than ownership transfers and racial quotas. Party leadership contends that economic growth and expanded employment opportunities represent more effective pathways to addressing historical inequalities than regulatory requirements that may compromise business competitiveness.

Herman Mashaba, leader of ActionSA and former mayor of Johannesburg, has articulated particularly forceful criticisms of BEE implementation. As former chair of the Free Market Foundation, Mashaba brings a business perspective to his political critique, arguing that empowerment policies have created a system of patronage benefiting politically connected elites while failing to generate meaningful opportunities for ordinary black South Africans.

Mashaba’s criticisms carry particular weight given his own success as a black entrepreneur who built substantial wealth through business acumen rather than political connections. His critique focuses less on the principle of economic transformation than on the specific mechanisms employed, which he contends have distorted market incentives and concentrated benefits among the already privileged.

Intellectual Critiques and Structural Analysis

Political analyst and businessman Moeletsi Mbeki, brother of former President Thabo Mbeki, has offered perhaps the most intellectually developed critique of BEE from within South Africa’s black intelligentsia. Mbeki has characterized BEE as a “virus” created by big business to co-opt black leadership and protect existing economic structures rather than achieve genuine transformation.

In Mbeki’s analysis, BEE serves corporate interests by creating a class of black stakeholders invested in maintaining existing business models and economic relationships. Rather than challenging concentrated ownership and promoting competitive dynamics, the empowerment framework has reinforced incumbents’ market positions while creating barriers to entry for new entrepreneurs without access to capital or political connections.

This structural critique suggests that BEE has fundamentally redirected the post-apartheid transformation project away from addressing underlying economic architecture toward accommodation within existing frameworks. The policy, in this view, represents a conservative turn that prioritizes stability and elite incorporation over the more radical economic restructuring that might genuinely alter wealth distribution and opportunity patterns.

The Defense of Transformation Imperatives

Despite mounting criticisms, BEE policies retain substantial support among constituencies who view transformation as an essential project requiring sustained commitment despite implementation challenges. Supporters contend that South Africa’s extreme inequalities—among the world’s highest by most measures—demand active intervention rather than reliance on market mechanisms that have historically perpetuated racial wealth gaps.

The argument for continued empowerment policies rests on several pillars. First, proponents note that white South Africans, representing less than 8% of the population, continue to control disproportionate shares of productive assets, corporate leadership positions, and wealth. Without active policies promoting ownership transfer and opportunity access, these patterns risk perpetual replication regardless of formal equality before the law.

Second, defenders highlight successful cases where BEE has genuinely transformed companies, created black business leaders, and generated economic participation previously denied to the majority population. While acknowledging implementation failures and elite capture in some instances, supporters argue for policy refinement rather than abandonment.

Third, advocates emphasize that historical injustices created through deliberate state policy require corrective measures beyond passive non-discrimination. The systematic exclusion of black South Africans from economic participation under apartheid created wealth disparities that market mechanisms alone cannot reasonably be expected to remedy within acceptable timeframes.

Broader Implications for South African Business

The 36ONE transaction illustrates how empowerment policies continue to shape strategic decisions across South Africa’s business landscape despite ongoing controversies. For companies seeking to maintain competitiveness in sectors where government procurement, institutional mandates, and reputational considerations matter significantly, transformation credentials have become essential business requirements rather than purely social initiatives.

This dynamic creates complex calculations for business leaders weighing the costs of compliance against the risks of non-participation in empowerment frameworks. While critics emphasize regulatory burdens and distorted incentives, many businesses have concluded that transformation alignment offers commercial advantages that justify associated complexities.

The financial services sector faces particularly acute pressure given pension funds’ substantial BEE requirements and government entities’ investment mandates. Asset managers without credible transformation credentials risk exclusion from significant market segments, creating strong commercial incentives for deals like 36ONE’s regardless of leaders’ personal views on empowerment policy.

International Perspectives and Comparative Context

South Africa’s empowerment policies exist within a broader global conversation about addressing historical injustices, promoting inclusive growth, and rectifying systematic exclusion. While the specific mechanisms vary, numerous countries have implemented affirmative action, minority business development programs, and targeted economic inclusion initiatives designed to remedy past discrimination.

The United States maintains minority business development programs, set-asides for disadvantaged business enterprises, and affirmative action policies across various sectors. Malaysia has implemented extensive Bumiputera policies promoting economic participation by ethnic Malays. India employs reservation systems for historically disadvantaged castes and tribes.

Each of these frameworks has generated similar debates about effectiveness, fairness, economic efficiency, and unintended consequences. The controversies surrounding South African BEE thus reflect broader tensions inherent in attempts to use policy interventions to accelerate social change and address entrenched inequalities.

Looking Forward: Transformation’s Evolving Landscape

The 36ONE empowerment deal represents one approach to navigating South Africa’s complex transformation landscape—pursuing meaningful ownership transfer while partnering with institutions demonstrably committed to social development objectives. Whether this model proves sustainable and effective in advancing broader transformation goals remains subject to ongoing assessment.

As South Africa approaches future elections and continues debating its economic direction, empowerment policies will likely remain contested terrain. The challenge facing policymakers involves designing frameworks that genuinely advance opportunity and wealth distribution while maintaining economic dynamism and investment attractiveness essential for job creation and growth.

For businesses like 36ONE, the path forward involves demonstrating that empowerment can coexist with commercial excellence, that transformation enhances rather than compromises competitiveness, and that ownership changes translate into meaningful participation rather than symbolic gestures. Success in these dimensions may help shift debates from whether transformation should occur to how it can be most effectively achieved.

The partnership between 36ONE and MI Capital offers a template for empowerment structures that connect ownership to tangible social impact through educational access and youth development. Whether such models can be replicated across sectors and scaled to address South Africa’s massive inequality challenges remains an open question—one that will significantly influence the country’s economic trajectory in the decades ahead.

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By: Montel Kamau

Serrari Financial Analyst

8th October, 2025