Financial services firm Alexander Forbes is to sell almost one-third of its South African business to a black empowerment investment company.

The company is controlled by Millennium Consolidated Investments (MCI) and two community trusts representing "beneficiaries from historically disadvantaged groups," Alexander Forbes said.

"MCI will also assist Alexander Forbes with its internal transformation from an empowerment perspective," the company said.

As part of a complex deal to avoid watering down shareholders' interests, Forbes is to buy out shareholders in its majority-owned Investment Solutions subsidiary.

Shares in Investment Solutions jumped by 20% in early trading in Johannesburg.

Eight years on

Alexander Forbes' move follows a government campaign which has urged firms to raise their proportion of black shareholders and managers.

Cyril Ramaphosa is at the forefront of the black empowerment movement

The South African world of commerce remains dominated by whites, eight years after the end of apartheid.

"We are delighted to have secured MCI as our lead empowerment shareholder and anticipate substantial added value and growth to our South African business," chief executive Graeme Kerrigan said.