Ninety One lists on the JSE

Ninety One founder Hendrik du Toit talks the demerger from Investec, Covid-19 and the rationale behind the company’s unique name.

NOMPU SIZIBA: Ninety One, formerly Investec Asset Management, listed in its own right away from Investec today. It’s a company that’s grown to be a multinational multi-billion rand asset manager since its modest birth in 1991. So what does it plan to do now that it’s stepping out on its own? I’m joined on the line by Hendrik du Toit, he’s the founder of Ninety One.

Thanks very much for joining us Mr Du Toit, just tell us what was the rationale for Ninety One which is formerly Investec Asset Management to branch off from Investec and go off on its own so to speak?

HENDRIK DU TOIT: Nompu, it started off leadership transition at Investec about two years, where 18 months ago Fani Titi and I were tasked by the board of joint chief executives to review the strategy and we then came up with a plan to simplify Investec, focus the businesses and establish clear growth trajectory for the key businesses within Investec. The asset management business was operating in a very different space from the banking and wealth business in the sense that it is a global business. It saw long-term growth in Asia and North America as well of course as continued to grow its domestic markets and the bank and wealth businesses is essentially a UK and South African business. So in order to address some of the challenges we face we thought let’s make it more most simple and let’s clarify the focus of the businesses and that was the rationale which I still firmly support and in spite of these markets believe we will pay dividends in the long run for the Investec shareholders and now the Ninety One shareholders as well.

NOMPU SIZIBA: In terms of the relationship between Ninety One and Investec, is there any relationship going forward, does Investec still have some shareholding, perhaps a minority shareholding in Ninety One?

HENDRIK DU TOIT: Yes, Investec has retained a 25% shareholding, the two largest shareholders in Ninety One is Investec and the management group, which has similar shareholding size, management have just over 20% and then 55% in the hands of public shareholders. For the time Investec has indicated that it will reduce it stake, it could have actually sold and replace it with new investors today but due to the market volatility over the last two weeks Investec decided to withdraw the offer and wait for better market conditions. Over time the companies will be completely independent but they are supportive of each other at this time.

NOMPU SIZIBA: So before we carry on, what’s with the name Ninety One? I mean it hardly rings a bell with the kind of work that you do as the former name did.

HENDRIK DU TOIT: Let me just tell you one thing, to get a name or a word thats not registered is very, very difficult these days. With everything already taken we ran an internal competition for a new brand because we knew we had to rebrand and one of our creative people in our marketing team came forward with an idea and said why not name the business after the year in which it was started. Our business started in 1991 and it was a year of massive change in the world. It was a year in which government finally started dismantling apartheid legislation in South Africa, it’s the year in which the Soviet Union ended and the Russian Republic was born out of that, it was the year in which the Internet became accessible to ordinary people. And of course it’s the year in which [Springbok] captain Siya Kolisi was born. So many things happened in 1991, it was a year of change, a year of excitement which also reflects the ethos and experience of the business.

NOMPU SIZIBA: So of course you’ve decided to list at around this time, but as you mentioned, it’s been a very volatile time. What’s the experience been like given the current circumstances that we find ourselves in?

HENDRIK DU TOIT: Well today we’ve had an orderly market. Shares trading sensibly, but for us it wasn’t about … Most companies when they list its either the founder is selling out or its a capital raising and in this case neither of those conditions hold because we were simply affecting a demerger of a financial group into two entities and giving the existing shareholder two pieces of pay points instead of one. So for us it really didn’t really matter what the conditions are and by the way it’s not bad to start when things are rough and end when things are good rather than the other way. So we were rather driven by the time lines we communicated to the market instead of trying to optimise market conditions.

NOMPU SIZIBA: So what’s Ninety One’s value proposition and how is it going to navigate what’s likely to be a long drawn slow equity market scenario with many experts not envisaging global markets to enjoy the all time highs that they were just recently enjoying. And of course we’ve seen our local market drop by 11% today.

HENDRIK DU TOIT: Yes, we are in for a very tough period but we also believe that this will pass and that particularly the coronavirus will pass and ultimately  the world economy will get back on track. Ninety One is an active asset manager, it has a very capital-like model and therefore it’s a robust business model that’s run by very experienced people and a very stable staff compliment and its in time like these that we can distinguish ourselves for our clients, which means you can then be rewarded by traditional business and support in the better times and also hope to improve shareholder value. Clearly we are in for a pretty tough season at this point in time, but we have been through those before.

NOMPU SIZIBA: That was Hendrik du Toit, he’s the founder of Ninety One.

Brought to you by Ninety One.

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