Easing out, but not too far
Founding fathers take a back seat to two new CEOS, but they don’t expect the firm’s culture to change
Stephen Koseff has, at 66, called time on his nearly 40-year tenure as CEO of Investec. He says he and long-time MD Bernard Kantor, who turns 69 this year, would rather step back while they still have energy and drive.
“I’m going from the front of the bus to the back of the bus. When they don’t drive fast enough I will push them,” Koseff, who comes from Benoni, tells the Financial Mail. “I’ve still got a lot to do at Investec, I just won’t be the CEO.”
Indeed, Koseff’s larger-thanlife personality will not let him stray far from the bank he has been instrumental in building from just eight employees in
1980 to more than 8, 000 today — with assets of nearly
R2.7 trillion.
“We’re going nowhere,” he says, referring to himself and Kantor.
Joint CEO designates Fani Titi and Hendrik du Toit — group chairman and head of Investec Asset Management respectively — will need to stand their ground.
Koseff says they will do this easily enough. “People can question and challenge me. I have no problem with a day-one starter saying, ‘Stephen, I think you spoke shit.’ [At Investec] anyone can talk to anyone about anything.”
His characteristically forthright manner will be missed. Though he and Kantor will step down in October, becoming nonexecutive directors from April next year, their involvement will undoubtedly extend beyond board meetings.
As early funders of some of SA’S most successful entrepreneurs, including Bidvest’s Brian Joffe and Jonathan Beare, an early backer of Aspen, Investec’s founding fathers will continue to attend to the bank’s private clients and cast a watchful eye over management.
“I don’t think the culture will change dramatically with the new leadership,” says Koseff. Titi and Du Toit, both 55, will, at a minimum, be tasked with maintaining Investec’s entrepreneurial spirit.
“You can’t take anything away from what [Koseff and Kantor] have built up,” says Sasfin Securities’ deputy chairman, David Shapiro.
“Koseff is a very good banker. He is exceptionally smart, but can take himself down to the lowest level and talk to everyone. That personality will be missed.”
There have, of course, been some spectacular failures on Koseff’s watch. Kensington, the UK’S largest subprime mortgage lender, which Investec bought in May 2007 for £283m, was, by Koseff’s own admission, “a falling knife”.
Investec has paid dearly for its UK legacy book. While Koseff is the kind of take-it-on-the-chin leader who will not dwell on the mistake, the bank has delivered disappointing returns.
Since its dual Johannesburg and London listing in June 2002, Investec has risen 253%, while its major domestic banking competitors, none of which has yet attempted to build serious scale in the UK, have leapt 631%.
Judging by Investec’s 3% shareprice gain on Tuesday, amid a global equities sell-off, market participants may feel it is time for a fresh pair of hands.
Koseff and Kantor have been grooming the next generation of leaders since at least November 2015, when Investec appointed new heads to its banking, asset management, and wealth and investment businesses.
Among these are Ciaran Whelan, David van der Walt (joint CEOS of the global private bank) and Richard Wainwright (CEO of Investec Bank SA).
“Day-to-day we have very seasoned bankers who know what they are doing,” says Koseff.
Whelan succeeds group risk and finance director, Glynn Burger, as head of risk. Kim Mcfarland, chief operating officer and chief financial officer of Investec Asset Management since 1993, takes over as group finance director, while Nishlan Samujh remains in his role as CFO.
Still, analysts are puzzled at the choice of Titi, a seasoned private equity executive, as joint CEO. Koseff quickly dismisses suggestions that it was a transformation appointment. “We are a meritocracy, we would not have put him in if he couldn’t do the job.”
As chairman, Titi has spent “half his time” at Investec over the past seven years, he says. “He knows the people, he understands the business; he is very smart, very collaborative and will become a good CEO.”
Koseff is equally contemptuous of comments that Du Toit is “a whitey [there] to chaperone the black oke”, as has been suggested by Bonang Mohale, CEO of Business Leadership SA. “It is very hard for one person to run this business.”
He and London-based Kantor have always worked in a joint CEO capacity, says Koseff. “We run a complex business in multiple geographies and we believe that the right solution for us as a firm is to have strong representation in the UK and in SA at CEO level.”
Johannesburg-based, Titi will primarily oversee the specialist bank, which manages about R1 trillion in private-client money. Du Toit will oversee the wealth and asset management units from London.
Though not a deal maker, Du Toit has a high profile internationally, having built Investec
Asset Management from a business with R200m in assets to one with £105bn.
His fund management experience means he has closely observed a number of companies and will bring fresh perspective to the role, says Stephen Meintjes, head of research at Momentum Securities.
Titi and Du Toit “fit the bill”, Meintjes says.