Investec plans demerger of asset management business

Investec will list its asset management on the London Stock Exchange as part of restructure following a strategic review of the Group.

Investec has outlined plans to demerge and publicly list its asset management business following the departure of its founding members next month.

The South African bank said in a statement that a strategic review of the company found ‘limited synergies’ between the Specialist Banking and Wealth & Investment businesses and the asset management unit.

Under the restructure, the Specialist Banking and Wealth & Investment businesses will remain part of the Group’s current structure, but as an independently listed company the asset management segment would be better positioned for growth.

Henrick Du Toit, who currently leads the asset management business at Investec and is due to become co-CEO of the Group alongside Fani Titi next month, will head up the spun-off unit following its listing.

At the same time, the current Group chief executive, Stephen Koseff, and Bernard Kantor, who is a managing director at Investec, will leave the firm.

“We are confident that the proposed demerger and listing of IAM (Investec Asset Management) provides the simplicity of structure and focus to enhance the long-term prospects of IAM and the remaining Group for the benefit of our shareholders, clients and employees,” Du Toit and Titi jointly commented.

“Investec has a heritage and culture of which we are proud, shaped by the dedication and commitment of our employees and the support of our clients. We look forward to working closely as Joint Group CEOs during this phase of our evolution and to implement this transaction which we expect will create significant shareholder value over time.”

Koseff and Kantor added that the individual businesses are well-positioned strategically with strong market positions and good prospects, and the time is right to demerge the asset management unit to support the next phase of the Group’s development.

“In recent years we have also made good progress in expanding our banking and wealth management franchises in our two key markets and improving their operational and financial performance,” they concluded. “We believe the transaction will allow these businesses to fulfil their full potential and shareholders will benefit from future value creation through direct ownership of two separately listed companies.”