Further to the announcement by Investec plc (LON: INVP) on 29 November 2019 relating to the proposed demerger and public listing of its global asset management business, Investec today announces Ninety One’s expected intention to undertake an initial public offering and the expected publication of a registration document that has been submitted for approval to the FCA. Pending a decision to proceed with Ninety One’s intention to IPO, Ninety One plc would apply for: (i) the admission of the Ninety One plc Shares to the premium listing segment of the Official List of the FCA and to trading on the Main Market of the LSE; and (ii) the secondary inward listing and admission to trading of the Ninety One plc Shares on the Main Board of the JSE, and Ninety One Limited, would apply for the primary listing and admission to trading of the Ninety One Limited Shares on the Main Board of the JSE.
Fani Titi and Hendrik du Toit, Joint CEOs of Investec, said:
“Today’s announcement is a significant milestone for the Investec Group. The demerger and listing of a fully-independent Ninety One is a major step in Investec Group’s programme to simplify and focus, and positions both the Ninety One and Investec Bank and Wealth businesses for long-term growth. This announcement precedes a shareholder vote on the demerger and listing, scheduled for 10 February 2020.”
1 Ninety One overview
Ninety One is a founder-led independent global asset manager, established in South Africa in 1991, with £121 billion in assets under management, as at 30 September 2019. Ninety One primarily offers a range of high-conviction, active strategies to its sophisticated global client base with over 1,600 employees across the world.
The Ninety One Group’s investment proposition for clients centres on its range of differentiated strategies managed by its specialist investment teams, providing access to a diverse range of asset classes and regions globally. Founded as an emerging market-focused South African asset management business, the Ninety One Group now operates and invests globally and has established a long-term growth track record, reflecting a resilient ability to grow through market cycles across both emerging and established market investments.
Today, the Ninety One Group serves its client base via five regional teams (known as Client Groups) – Africa, the United Kingdom, Asia Pacific, the Americas and Europe. Clients are served across two distribution channels: Institutional and Advisor. Institutional clients include some of the world’s largest private and public sector pension funds, sovereign wealth funds, insurers, corporates, foundations and central banks, while Advisor clients include large retail groups, wealth managers, private banks and intermediaries serving individual investors.
The Ninety One Group has grown assets under management from £40 million in 1991 to £121 billion as at 30 September 2019, with approximately £83.3 billion managed on behalf of non-South African clients. For the six months ended 30 September 2019, Ninety One had net inflows of £3.2 billion and operating profit before exceptional items of £97.3 million, and for the year ended 31 March 2019 it had net inflows of £6.1 billion and operating profit before exceptional items of £179.4 million.
The leadership team that founded the Ninety One business has played a central role in the firm’s growth over the last 28 years and continues to manage the Ninety One Group today. As a result, the Ninety One Group’s employee ownership culture and purpose-led business approach underpins its investment proposition. The Ninety One Group operates in line with strategic principles centred around patient and organic growth, driven by long-term client demand and alignment with stakeholders.
2 Transaction summary
Should Ninety One proceed with its intention to IPO, the following is intended:
· In the case of Ninety One plc, (i) the admission of the Ninety One plc Shares to the premium listing segment of the Official List of the FCA and to trading on the Main Market of the LSE; and (ii) the secondary inward listing and admission to trading of the Ninety One plc Shares on the Main Board of the JSE and, in the case of Ninety One Limited, the primary listing and admission to trading of the Ninety One Limited Shares on the Main Board of the JSE.
· An offer of existing Ninety One Shares to be sold by Investec plc and Investec Limited.
· The Ninety One Directors believe the Global Offer and Admission will position the Ninety One Group for its next stage of development by:
o allowing Ninety One to operate as an independent business, benefiting clients, employees and shareholders;
o preserving and promoting a high degree of employee ownership;
o creating a suitable structure for talent attraction and retention; and
o aligning the organisation and its staff for long-term success.
· Following the steps above and assuming the Global Offer proceeds as currently expected, it is expected that:
o approximately 15% of the combined total issued share capital of Ninety One will be retained by Investec Group;
o approximately 55% of the combined total issued share capital of Ninety One will be held by Investec plc and Investec Limited ordinary shareholders;
o at least 20% of the combined total issued share capital of Ninety One will be held by Ninety One staff; and
o approximately 10% of the combined total issued share capital of Ninety One will be held by new institutional and certain other investors.
· Immediately following Admission, Ninety One intends to have a free float of 60-65% of Ninety One’s issued share capital and expects that it would be eligible for inclusion in the FTSE UK and JSE SA indices.
· J.P. Morgan Securities plc has been engaged to act as Sole Global Co-ordinator, Joint Bookrunner and UK Sponsor, Merrill Lynch International and Investec Bank plc have been engaged to act as Joint Bookrunners in the event the Global Offer proceeds and J.P. Morgan Equities South Africa Proprietary Limited has been engaged to act as JSE Sponsor. J.P. Morgan Cazenove and Fenchurch Advisory Partners LLP are acting as Financial Advisers to Investec.
A copy of the Registration Document will be submitted to the FCA for approval and will be available for inspection at the offices of Ninety One’s solicitors once approved by the FCA. A copy of the Registration Document will also be available online at www.investec.com/demerger and www.investecassetmanagement.com/disclosure, in each case, subject to certain access restrictions.
3 Current trading
The Ninety One Group has continued the trend of operating profit growth since 30 September 2019, with higher pound sterling AUM at 31 December 2019 and net inflows for the quarter ended 31 December 2019.
4 Information for bona-fide, unconnected sell side research analysts
The Ninety One Capital Markets Day presentation is available on the Investec website using the following link: https://www.investec.com/investorrelations.
Additional information in relation to Ninety One will be made available via a link to unconnected research analysts today. Please contact Investor Relations if you would like to receive access to the information.