Investec Asset Management, which manages $70 billion, said clients want the money manager to operate independently from the banking units of Investec and that it can’t rule out an initial public offering in the future.
“An IPO is not on the cards for the foreseeable future,” Hendrik du Toit, CEO of the fund-management unit, said in an interview in London. “For the long term, it will be unwise to rule out any strategic options. The uncertainty of the environment calls for open-mindedness on all our strategic options. Investec Asset Management is very comfortable with its current structure.”
Investec Asset Management earned one-sixth of Investec’s operating profit in the year through March. It will consider a range of options, which may include bringing in strategic investors, as the money manager seeks to boost independence while improving shareholder value or adapting to any regulatory changes, Mr. du Toit said.
“We obviously need independence, but the format is not yet clear and we have very good owners,” he said. The full value of the assets held by the division isn’t reflected in the parent’s share price, he said.
Investec PLC, which entered the FTSE 100 index this year, has a market value of £3.7 billion ($5.4 billion).
“Clients are placing an enormous premium on overt independence,” said Philip Saunders, head of the Investec Global Asset Allocation team. There are continuing discussions with Investec PLC on the issue, he said.
The fund manager is also “not big on” mergers and acquisitions “but may need to be in time,” Mr. du Toit said.