Investec, the South African banking group, said on Friday it plans to split off its asset management arm and list it in London.
The bank, which is dual-listed in London and Johannesburg, said that it would spin off Investec Asset Management to “simplify the group”, subject to regulatory and shareholder approval.
News of the plans sent Investec’s London-listed shares up more than 12 per cent.
IAM, which had £109bn in assets under management at August 31, will be listed on the London Stock Exchange with an inward listing on the Johannesburg Stock Exchange, it said. The remaining group, which includes its specialist banking and its wealth management business, would keep its dual listing structure, Investec said.
IAM’s management will retain its stake in that business, while the remaining group “may retain a minority stake in IAM”, it said. “Post the implementation of the transaction, shareholders of the Investec Group will have a direct shareholding in IAM in addition to their holding in the remaining group,” it added.
The move comes as the bank undertakes a long-awaited overhaul of its management team. In February, the bank announced plans for Fani Titi, who has served as non-executive director on Investec’s board for 14 years and held the chairmanship of the group for six, and Hendrik du Toit, IAM’s founding chief executive, to take over as co-CEOs of the group from October 1.
However, on Friday, it said that after the demerger, Mr Titi would “lead” the group, while Mr du Toit would become executive chair of IAM. “The structure and composition of the boards of the remaining group and IAM will be determined in due course,” it added.
Stephen Koseff, the current chief executive and Bernard Kantor, the managing director said:
It is now the right time to demerge and list our asset management business to support it in the next phase of its development . . . 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.
Messrs Koseff and Kantor will step down from their current roles after 40 years at the firm, but stay on as non-executives.
JPMorgan Cazenove and Fenchurch Advisory Partners will be financial advisers for the demerger, which it expects will be completed within the next 12 months.
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