Investec announced the demerger and listing of Investec Asset Management on Friday, following a strategic review process carried out by its board and executive directors.
The FTSE 250 firm said the decision was made as there were “compelling” current and potential linkages between its specialist banking and wealth and investment businesses, however there were “limited synergies” between those two divisions and Investec Asset Management (IAM).
It said Investec Specialist Banking and Investec Wealth & Investment would remain part of the group's current dual listed companies structure, with the transaction designed to simplify the group and focus IAM and the remaining group on their respective growth paths.
The board said that would “enhance” the long-term prospects and potential of both businesses for the benefit of their shareholders, clients and employees.
On the management front, Fani Titi and Hendrik du Toit were set to become joint chief executive officers of the group on 1 October.
Kim McFarland would also become an executive director of the group board on that date. With Ciaran Whelan set to assume his role as global head of risk on 1 April next year.
Stephen Koseff and Bernard Kantor would step down from their roles as CEO and managing director, respectively, on 1 October.
From that date, they would continue to serve as executive directors with primary responsibility for assisting the incoming joint CEOs until completion of the transaction.
Following the implementation of the transaction, Fani Titi would lead the remaining group and Hendrik du Toit would lead IAM.
The Investec board said the structure and composition of the boards of the remaining group and IAM would be determined “in due course” as part of the transaction implementation.
It said the “precise mechanics” of the demerger and listing would be communicated in due course.
Investec intended for IAM to be listed on the London Stock Exchange, with an inward listing on the JSE.
The IAM management stake in the company would be retained, and the remaining group may retain a minority stake in IAM.
Post the implementation of the transaction, shareholders of the Investec Group would have a direct shareholding in IAM in addition to their holding in the remaining group.
“Our individual businesses are well-positioned strategically, with strong market positions and good prospects,” said CEO Stephen Koseff and managing director Bernard Kantor in a joint statement.
“It is now the right time to demerge and list our asset management business to support it in the next phase of its development.”
Koseff and Kantor said that in recent years, the company had also made “good progress” in expanding its banking and wealth management franchises in its 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.”
Fani Titi and Hendrik du Toit, joint CEO-designates, added that they were “confident” that the proposed demerger and listing of IAM provided the simplicity of structure and focus, to enhance the long-term prospects of IAM and the remaining group for the benefit of 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,” said Titi and du Toit.
“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.”