South African financial services group Investec is set to demerge and separately list its asset management business following a strategic review.
The review found “limited synergies” between Investec Asset Management (IAM), which manages £109bn of assets in the UK, South Africa, Australia and the US, and the firm’s specialist banking and wealth management businesses.
The asset management unit will be listed on both the London as well as Johannesburg stock exchanges.
The company believes that as a standalone entity, IAM will be able to ramp up its growth and have a better ability to lure talent.
IAM management will retain its stake in the listed entity, whereas the shareholders of the wider group will own a minority interest.
The move is expected to be completed in the next one year, subject to shareholder and regulatory nod.
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Moreover, Fani Titi and Hendrik du Toit will become co-CEOs of the group, effective 1 October 2018. The duo will replace Stephen Koseff.
After the listing, du Toit will be at the helm of IAM while Titi will be in charge of the remaining Investec group.
“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,” Titi and du Toit noted.
Investec managing director Bernard Kantor is also set to step down in October this year. Besides, Ciaran Whelan will join as the new global head of risk on 1 April 2019.
Commenting on the latest move, Koseff and Kantor said: “Our individual businesses are well-positioned strategically, with strong market positions and good prospects. It is now the right time to demerge and list our asset management business to support it in the next phase of its 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. 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.”
Meanwhile, the remaining group will now focus on digitalisation, enhancing market share in niche operations, reducing costs, and attracting more discretionary funds.