Ninety OneMay 20 2020

Profits up 11% at Ninety One but assets take hit

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Profits up 11% at Ninety One but assets take hit
Hendrik Du Toit, chief executive officer at Ninety One

Profits at Ninety One, the asset manager formerly known as Investec Asset Management, grew 11 per cent in the year to March 31, as assets were hit by the coronavirus crisis.

The firm’s full-year results, published today (May 20), showed pre-tax profits reached £198.5m but assets under management dropped 7 per cent to £103.4bn as market volatility offset the £6bn net inflows seen by the firm.

Short-term investment performance was also hit by the ongoing coronavirus crisis, the firms said.

Hendrik Du Toit, founder and chief executive officer, said: “After markets were hit by the Covid-19 correction in March 2020, the situation deteriorated to the point where our aggregate performance looked decidedly average over one and three years.”

Ninety One recently de-merged from its parent company Investec Bank, with Mr Du Toit, a veteran at Investec, becoming chief executive. 

The plan to de-merge and publicly list the business was first revealed in September 2019 and was completed on March 16.

According to the results, the demerger has cost £10.9m, which mainly consisted of rebranding and network migration costs.

Following the separation of the business, employees now own more than 21 per cent of Ninety One.

Mr Du Toit said: "Last year was a momentous year for Ninety One. We ended our 29th year in business with record earnings, a quality client base from across the world, highly motivated people and an experienced leadership team, but were challenged by the consequences of the Covid-19 pandemic.

"During the last month of the 2020 financial year, we successfully demerged from Investec, listed on the London and Johannesburg Stock Exchanges, and rebranded as Ninety One.

He added: “These developments took place in the face of extreme market volatility and weakened economic prospects, which we expect to endure for some time.

"The resilience of our people and technology enabled us to provide all our clients with uninterrupted service and intensified engagement."

He said the firm had successfully facilitated remote working for its staff mere days after the demerger and listing.

It had not furloughed or made redundant any of its staff.

The firm is now focused on growing in both the global and emerging markets and said it welcomed the opportunities Covid-19 may bring.

Mr Du Toit said: “The near-term challenges facing emerging markets, relating to the Covid-19-triggered downturn, have not changed our long-term view.

"On the contrary, we expect the next few years to provide our investors with compelling long-term opportunities in both developed and emerging markets and risk assets in general. 

“The stable and experienced investment teams at Ninety One are motivated to make the most of these opportunities for our clients and shareholders.”