South Africa’s biggest asset manager just had a record year

Global investment manager Ninety One on Wednesday (18 May) reported a 31% increase in profit before tax for the year ended March 2022, to a record £267.1 million – R5.3 billion.

Established in South Africa in 1991 as Investec Asset Management, the firm started offering domestic investments in an emerging market. In 2020, almost three decades of organic growth later, the firm demerged from Investec Group and became Ninety One.

The group said its assets under management rose 10% to close the full-year period at a record £143.9 billion – R2.85 trillion.

The company, dual-listed on the London Stock Exchange and the Johannesburg Stock Exchange, had net inflows of £5 billion, and reported a 34% increase in basic earnings per share to 22.6 pence. Adjusted earnings per share rose 13% to 19.2 pence.

Ninety One, which employs around 1,200 people, proposed a final dividend of 7.7 pence, resulting in the full-year dividend increasing 16% to 14.6 pence a share.

Management fees increased 13% to £632.8 million (2021: £561.0 million), against a 16% increase in average AUM.

Hendrik du Toit, founder and chief executive of Ninety One, said: “I am delighted to announce record earnings and assets under management after 31 years in business. Ninety One enjoyed strong support from our clients as reflected by net inflows of £5 billion.

“The combination of strategic clarity, disciplined execution, competitive long-term investment performance, a motivated, stable team and a long-term approach to business continues to work well for Ninety One.”

He said that the spectre of inflation and rising interest rates in a world of supply chain disruption and increased political uncertainty speaks to volatile markets and a diminished risk appetite.

“We nevertheless see substantial long-term growth opportunities for Ninety One in the markets we serve. Our approach to value creation has not changed. We will continue to invest in our people and our business to deliver for our clients. With employee ownership now over 25% our commitment to long-term value creation for all stakeholders is clear.”

Du Toit said that the group is beginning to see the results of recent investments in the UK. He also pointed to good momentum in South Africa, “where we have a market-leading position. We believe this positions us well for the expected changes arising due to the exchange controls relaxation over the coming years”.

He said that ongoing travel restrictions have slowed down the implementation of the group’s plans for China. “In spite of the near-term obstacles, we continue to see China as an opportunity for Ninety One over the long term.

The group noted that business conditions deteriorated markedly towards the end of the reporting period. The Russian invasion of Ukraine added substantial uncertainty to an environment challenged by rising inflation, expectations of interest rate increases and liquidity withdrawal amidst growing political uncertainty at the geopolitical level, it said.

At the end of the third quarter, the group said its short- and long-term investment performance numbers looked even more compelling than at the interim stage.

“Unfortunately we were affected by the ensuing volatility in the final quarter. Firmwide investment performance remains competitive in market-relevant areas but there is room for improvement over the coming year.”

At the interim stage we pointed to risks that could make market conditions less supportive than at the outset of this reporting period. Many of those have materialised and were accelerated by the Russian invasion of Ukraine. The coming year will be challenging and we enter it with appropriate levels of caution,” du Toit said.

“We see ample growth opportunities ahead as long as we keep delivering for our clients and serve society at large. We will be actively involved in the move to a more sustainable future and in the financing of the impending transition,” the chief executive said.

An Alexforbes survey showed that Ninety One was South Africa’s largest asset manager at the end of 2021, ahead of Stanlib, Coronation and Old Mutual Investment Group.

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South Africa’s biggest asset manager just had a record year