ARI Nice guy in charge? Buy the stock

It’s one way to assess a company — if the CEO has the right personal qualities, they’ll reflect on the balance sheet

You can feel the energy of Hendrik du Toit as he arrives at the restaurant. It is an unusual dinner because the Ninety One CEO and I are friends. However, this meeting is an interview for

IM.

My aim is to show that an investor can pick a share based on the values of the CEO. Forget the mounds of information. It is an emotional intelligence diagnosis. Du Toit is the guinea pig.

Unsurprisingly, he sees a strong link between good leadership and good energy. It must be energy that gives rather than takes. Du Toit gives in abundance.

Since Ninety One (previously Investec Asset Management) launched in

1991 — the year from which it takes its name — Du Toit has taken it from zero to about R3-trillion in assets under management.

Du Toit and I were regular touch-rugby players on Camps Bay beach. He once came to a game but chose to do a “light” 40km run to Chapman’s Peak and back instead. He is a machine and this washes through into the business.

Du Toit started his career at Old Mutual, as it was coming out of the scandal that had sunk Greg Blank. He wanted more, and Old Mutual was too slow. Imagine keeping that energy down. A school friend at Investec put in a word for him, and the rest is history.

Du Toit is quick to point out that corporate culture, as espoused by the founders of Investec, is a big part of his business philosophy.

The culture of Ninety One is about being fair. For example, the wealth generated has been equitably divided — Du Toit and those who were with him at the start have real wealth; the next level is financially supercomfortable; and so on. Even the security guards, who work for an outside service provider, get fed at Ninety One’s offices. It does feel fair.

Now take a step outside. Shareholders have split (roughly equally) the financial rewards with employees, over time.

This fairness permeates his politics. Du Toit was part of a group of Stellenbosch student leaders who tried to travel to Zambia in the early 1980s to meet Thabo Mbeki and ANC Youth League leaders. The chancellor of Stellenbosch University at the time was prime minister PW Botha, who withdrew their passports. Still, Du Toit continued to build links with the ANC through his university years. Those links are still in place today.

In 1998, Investec Bank landed in London and Du Toit hitched a ride with his asset management team. The rest is global, as they say.

Du Toit shifts the dinner chat to growth. Ninety One has spread its wings through Europe and aims to build its fledgling network in North America. Hong Kong, where Ninety One is well established, will be the springboard into China.

Du Toit hasn’t forgotten his home base. South African companies that neglect the domestic market to grow their offshore operations are making a mistake, he believes. South Africa is still a substantial part of Ninety One’s business.

The world is in turmoil. Markets are jittery. An uncomfortable time to buy Ninety One shares.

Still, Ninety One is way ahead of South African asset managers in its geographical spread and is now ready to spring into the gigantic markets of the US and China.

The unbundling of Investec Asset Management into

Ninety One has reinvigorated the team. It was a big call to do so mid-pandemic, and Du Doit was ready to make it. He probably jumped on a table and shouted: “Kom, manne!”

As we leave, Du Toit promises to catch up again. He leaves the next day for Gauteng, then Europe and finally North America, at a pace slightly quicker than a whistle stop.

Du Toit is now 60. He is an experienced operator and is in good physical shape. More important for an investor, he hasn’t completed building his legacy. You can see that faraway look in his eyes.

The Hendrik du Toit story is not nearly over. However, time for the diagnosis. It’s quick: I like the captain; buy the ship. It’s a long-term hold.

The unbundling of Investec Asset Management into Ninety One has reinvigorated the team. It was a big call to do so mid-pandemic, and Du Doit was ready to make it. He probably jumped on a table and shouted: Kom, manne!’