Investec shares jump as group plans to spin off and list business in London
Investec Asset Management is expected to be hived off and listed as a separate entity.
Shares in banking group Investec surged as its board announced plans to spin off its asset management division.
The South African group expects the separated Investec Asset Management (IAM) business to be listed on the London Stock Exchange within the next 12 months.
It expects the move to simplify the company’s structure, while focusing IAM and the remaining group on their “respective growth plans”.
“As an independently listed company, IAM will be better positioned to accelerate its growth and have an enhanced ability to attract and retain investment talent,” the group said.
It follows a strategic review of the group, having recently divested some of its non-core businesses, expanded its wealth management platforms and simplified its banking business.
The news sent the firm’s shares up 10% in morning trading, pushing it to the top of the FTSE 250.
Investec Asset Management has around £109 billion in third-party assets under management, and serves global clients from offices in the likes of London, Cape Town, New York, Sydney, Hong Kong, Singapore and Luxembourg.
The spin-off would mean the remaining group would be made up of Investec’s specialist bank and wealth manager.
“The strategy going forward is to drive improved returns through growing market share in its niche businesses, enhancing its digitalisation offering, attracting discretionary funds under management, implementing cost efficiency initiatives and driving further collaboration between the Specialist Banking and Wealth and Investment businesses,” Investec said.
“The remaining group is well positioned to deliver on these objectives and increase its return to shareholders over the medium term.”
Hendrik du Toit, who will become joint chief executive of the group with Fani Titi on October 1, will lead the spun-off Investec Asset Management business.
The separation of IAM is still subject to approval by regulators and shareholders, but is expected to be completed within the next year.
IAM management is expected to retain its stake in the company, while the remaining group will keep a minority holding.
Mr Titi and Mr du Toit said: “We are confident that the proposed demerger and listing of IAM 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.
“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.”