Investec's stock market jump on news asset unit will go its own way

Investec announced Friday the proposed split and a separate listing of Investec Asset Management (IAM) from the larger specialized banking group.

In the morning morning, the share price rose 10% against R104.50.

The move will see the Investec Asset Management list on the London Stock Exchange with an internal listing on the JSE as soon as the approval of the shareholders and the consents for supervisors have been obtained.

Stephen Koseff, the outgoing CEO of Investec, said that the decision coincides with the changes in executive management announced earlier this year and that prompted a strategic review of the company.

"The outcome of the strategic review was that the group consists of a number of successful companies with different capital requirements and growth paths.Although there are interesting and current links between the specialized banking and asset management activities, there are limited synergies with Investec Asset Management."

The specialist banking group will retain a residual interest in Investec Asset Management, which will be converted in due course. Hendrik du Toit will lead the new asset management entity, while Fani Titi will be the specialist for banking and asset management. Both have been named to take over Koseff on October 1st.

The pair will manage the split and, after completion, Titi will head the specialized bank, while Du Toit will take a new path in asset management activities.

"This is about the focus and simplicity of the company structure: the dual listing structure is too complex and cumbersome for an asset management company, so while separating income and revenue, we do not separate the cultural links of the two companies," said Du Toit.

"We believe that the risk of executing IAM from the larger Investec group is low, and we believe that this will be of great value to shareholders over time." Our shareholders have argued that due to the complexity of the value reduction structure, and by doing this we can let the companies move on and create value, "said Titi.

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