The ‘risk-off’ approach taken by advised clients following this year's market crashes numbed Ninety One’s new business momentum, its chief executive has claimed.
In the company's interim results for the six months to September 30, published today (November 17), it reported net outflows of £300m across that period.
Hendrik du Toit, chief executive of Ninety One, said: “Although aggregate investment performance has improved, flows were impacted by a few large mandate losses relating to past performance.
“The initial "risk-off" approach from clients in the adviser channel and lower than usual levels of pipeline visibility in parts of the institutional market affected new business momentum.”
Ninety One’s six months of net outflows followed a year of positive inflows for the newly spun-off firm, which reported £6bn and £3.2bn of net inflows for the six months to March 2020 and September 2019 respectively.
Today’s results showed its assets under management stood at £119bn at the end of September, up from the £103bn reported in March but level with the £120bn measured in September 2019.
Ninety One de-merged from its parent company, Investec Bank, and floated on the London Stock Exchange in March, with Mr Du Toit, a veteran at Investec, becoming chief executive.
When the firm first spun off, employees owned 21 per cent of the new firm. However, today’s results show that share has increased to 22.5 per cent.
Mr du Toit added: “In the face of challenging operating conditions, the people of Ninety One remained focused on what really matters: serving and supporting our clients in these unprecedented times.
“We believe in the considerable long-term opportunity for Ninety One to grow organically. Our strategy is clear and our focus remains on execution."
In September, Ninety One lost the mandate to manage the Temple Bar investment trust after its veteran fund manager Alistair Mundy took a leave of absence for health reasons.
Ninety One, and previously Investec, had managed the trust since 2002.
The company's revenue and adjusted operating revenue were steady at £297m and £289m respectively, while profit before tax was up 3 per cent year-on-year to £94.8m.
Ninety One also announced a interim dividend of 5.9p per share.
Mr du Toit said: “These results evidence the resilience of our diversified, capital-light, organic business model.
“Our sustained investment in technology over many years and the positive mindset of our people supported the shift to virtual client engagement and remote working and then a partial return to the office over the reporting period.”
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