Back to when it all began
It’s goodbye Investec Asset Management, hello Ninety One
● It was the start of a new decade — the Berlin Wall had just fallen, the Soviet Union was unravelling and SA, though in a recession, was transitioning from stuffy isolation to a world of opportunities.
“I was stuck in Old Mutual at the time, a bit frustrated with the bureaucracy of a big insurance company,” says Hendrik du Toit, founder and longtime CEO of Investec Asset Management (IAM).
Du Toit, then 29, started the business in 1991 with R200m worth of assets under management, including Investec’s own pension fund.
While Quantec tracksuits and high-top sneakers were all the rage on the streets, pessimism was trending at SA’s asset managers. “At the time, being positive was actually contrarian,” says Du Toit.
Others in the industry flocked to largecap stocks as a store of value, often inflating the prices even more. But Du Toit and his team built a reputation for backing smaller winners early on, such as Bidvest, Imperial, Pepkor and Shoprite. And IAM has since grown into international markets and now has assets under management of nearly R2.4-trillion.
This is the history Du Toit wants to channel with the asset manager’s rebranding to Ninety One, announced this week. That is Ninety One as in 1991.
The move is part of what has become known simply as “the demerger” — Investec’s bid to unlock value for shareholders by splitting the bank from the asset management unit.
“If you are in the broader financial services business there are many things that can distract you,” says Du Toit, who has also been joint CEO of Investec since last year.
As part of the split, the asset management business will develop its own brand and identity, which is why it is dropping both the zebra logo and the Investec name.
Shareholders still need to approve the demerger, but the split and the independent listing of Ninety One is on track for the first quarter of next year.
Du Toit is aligning the business for the next phase of growth, which he believes will be largely in markets such as China and the US.
Apart from the fight for survival that most businesses go through in their first few years, he says “internationalising” IAM was the toughest part. And growth was not bought; it came organically as his team “won the away-games convincingly” in its expansion into foreign markets. Though Ninety One will be listed in both Johannesburg and London, he stresses that the business is international. It has strong platforms in SA and the UK and an ever-firmer foothold in Hong Kong.
“Nearly three-quarters of our business is now in markets outside SA, markets where there is still growth,” he adds.
But home will still be SA and the head office will be in Cape Town. “It does not matter where in the world you operate, you have to perform in your home market,” says Du Toit.
With Ninety One he does not want to mop up the entire South African market, opting instead to bring an international proposition to investors in Africa and to do that well.
And thinking back to 1991, when he was IAM’s first employee, Du Toit smiles and laments that he should have demanded a slice of equity. “I was just happy to earn a salary and get my car paid off.”