In­vestec unit to go it alone now

SHARES JUMP: BIG­GEST IN­CREASE SINCE MARCH 2009

The Citizen (Gauteng) - - BUSINESS -

It is like let­ting one of our chil­dren go, says Stephen Kos­eff.

In­vestec Plc is spin­ning off its as­set-man­age­ment unit af­ter a strate­gic re­view found there is lit­tle syn­ergy with its bank­ing and wealth and in­vest­ment divi­sions. The stock ral­lied the most in nine years.

In­vestec As­set Man­age­ment, which over­sees £109 bil­lion across its of­fices in Bri­tain, South Africa, Aus­tralia and the US, will be headed by the money man­ager’s found­ing CEO, Hen­drik du Toit, In­vestec stated yes­ter­day. The re­main­ing busi­nesses will be headed by Fani Titi.

The com­pany plans to trade the money man­ager ’s se­cu­ri­ties in London with an­other list­ing in Johannesburg as In­vestec’s found­ing chiefs, Stephen Kos­eff and Bernard Kan­tor, pre­pare to step down next month af­ter more than 40 years with the com­pany.

It fol­lows a sim­i­lar step by Deutsche Bank AG, which in March spun off its as­set man­age­ment unit, and a split by Old Mu­tual Plc that broke up its UK wealth man­age­ment and African bank­ing and in­sur­ance busi­nesses.

This is a “very pos­i­tive” move that will help In­vestec As­set Man­age­ment achieve a higher val­u­a­tion than within the larger group, said Richard Has­son, a money man­ager at Elec­tus Fund Man­agers. In­vestec As­set Man­age­ment “has been one of the big­gest as­set gath­er­ers as a per­cent­age of their as­sets un­der man­age­ment over the last ten years, so it re­ally has been a good story.”

Shares in In­vestec jumped as much as 13%, the big­gest in­crease since March 2009, to 547.60 pence in London.

In­vestec As­set Man­age­ment ac­counted for about a third of op­er­at­ing profit in the 12 months through March. The divi­sion will prob­a­bly re­port earn­ings for the

It re­ally has been a good story

six months through September 30 that will be “ahead of” the year ear­lier pe­riod, fol­low­ing net in­flows of £4.4 bil­lion, In­vestec said in a sep­a­rate state­ment.

In­vestec’s spe­cial­ist bank­ing divi­sion, which ac­counts for more than 70% of its op­er­at­ing earn­ings, will also post bet­ter fis­cal first-half profit than a year ago, mainly be­cause of an im­proved per­for­mance from its UK busi­ness. Wealth and in­vest­ment is lag­ging last year’s in­terim earn­ings, In­vestec said.

‘One of our chil­dren’

The sep­a­ra­tion of the as­set-man­age­ment unit will sup­port the next phase of its de­vel­op­ment, Kos­eff and Kan­tor said in the state­ment. While the pre­cise me­chan­ics of the “de­merger and list­ing” still need to be fi­nalised, the com­pany is hop­ing to com­plete it within 12 months, sub­ject to reg­u­la­tory ap­provals, Kos­eff said.

“It is like let­ting one of our chil­dren go,” he said. “We have been build­ing this busi­ness with In­vestec As­set Man­age­ment, who will re­tain its stake in the busi­ness, while In­vestec may keep a mi­nor­ity stake in the money man­ager,” the com­pany said. – Bloomberg

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.