Ninety One signs long-term partnership with Sanlam Group as H1 profits fall

Investment manager Ninety One has acquired South African financial services group Sanlam Investment Management, adding £17bn in assets under management (AUM), as the company reported a 10% decline in first-half profits.

As part of the deal, Ninety One will take over Sanlam Investment Management Proprietary, an investment management business wholly owned by Sanlam Investment Holdings – which is 65.6%-owned by the Sanlam Group.

Through the partnership, Ninety One will become the primary active investment manager for Sanlam, while Sanlam will serve as an anchor investor in Ninety One's international private and specialist credit strategies that meet its investment requirements, the company said on Wednesday.

Ninety One will also become the permanent investment manager of Sanlam's UK division, though this will remain a wholly owned subsidiary of the Sanlam Group.

The deal will see Sanlam Group take a 12.3% stake in Ninety One.

"We are looking forward to a long and fruitful relationship with Sanlam, a business with a powerful brand and significant scale in South Africa," said Ninety One's founder and chief executive Hendrik du Toit.

"Our experience and expertise are complementary. This agreement will give us the opportunity, as leaders in our respective markets, to create additional value for our stakeholders. We are making a substantial investment in the future of South Africa."

The news came as Ninety One reported a 1% increase in AUM in the six months to 30 September to £127.4m in a period characterised by positive bond and equity markets but "muted demand" for risk-on strategies, especially in emerging markets.

Pre-tax profit fell to £93.3m from £104m a year earlier, as the adjusted operating profit margin slipped to 30.5% from 32.6%.

"It is encouraging to note that we have experienced a significant improvement in inflows and business opportunities since September. In spite of cyclical demand headwinds, we remain committed to our focus areas and chosen markets," du Toit said.

"Looking ahead we are encouraged by an environment of lower interest rates, broadening markets and an improving new business pipeline. This optimism should be tempered by the elevated levels of political risk in the world in which we operate."

Shares were up 1.5% at 164.5p by 0851 GMT.