Ninety One’s share price was one of the biggest movers on the JSE Wednesday after it announced an increase in global assets under management by 4% to £130.8 billion (R3.15 trillion) in the year to March 31, buoyed by a stronger second half performance.
Full year net outflows for the JSE- and London-listed group that was spun off Investec in 2020 came to £4.9bn, following first half net outflows of £5.3bn and net inflows of £0.4bn in the second half. The share price gained up to 6.7% on the JSE to R41.54 on Wednesday, bringing the year-to-date gain to over 13%.
“Ninety One regained positive flow momentum in the second half. Business conditions improved in the final quarter,” founder and CEO Hendrik du Toit said at the release of the results. He added in a statement it was a “robust financial performance,” with an operating profit margin of 31.2%.
A final dividend of 6.8 pence was declared, bringing the full year payout to 12.2 pence a share. “Conditions remain challenging, but business momentum has improved,” said Du Toit. With a 32.6% shareholding, their staff were motivated and committed, he said. Average assets under management increased 4% to £129bn.
Du Toit said their previously announced transaction with Sanlam is on track. “While we expect economic uncertainty and market volatility to persist, we are encouraged by early indications that demand is shifting towards our offering,” he said.
The higher closing AUM was due to a positive market and foreign exchange impact of £9.7bn (2024: negative £6.1bn), which outweighed net outflows. The institutional net outflows were mainly from fixed income and multi-asset strategies, while advisor net outflows were mainly from equity strategies, followed by multi-asset. The institutional channel saw notable positive inflows in the second half.
The UK client group’s net outflows were driven by some large clients rebalancing their portfolios with reduced allocations to certain equity strategies. Within the Americas clients, outflows were largely due to client restructurings, but there was a return to net inflows from Latin American institutional clients compared with the prior year.
For the Africa client group, the second half saw some sizeable client wins into global equities, while the Europe client group’s positive second half was driven by fixed income and European and Asian equity strategies.
In terms of investment performance, Ninety One’s short and medium-term performance had improved, with one- and three-year outperformance closing at 68% and 59% respectively, compared with 46% and 43% at March 31, 2024, respectively.
The five and ten-year outperformance closed at 72% and 81% respectively, compared with 64% and 76% at the same time last year, respectively.
The firm-wide outperformance was calculated as the sum of the total market values for individual portfolios that have gross positive active returns, expressed as a percentage of total AUM.
The UK client group AUM fell by 13% to £21.13bn, while that for the Asia Pacific clients increased by 14% to £23.62bn. AUM from African clients was up 9% to £55.68bn, while AUM from clients in Europe increased 3% to £14.96bn.
In November last year, Ninety One and Sanlam Group announced a relationship in which Ninety One will acquire Sanlam Investment Management, while Sanlam Group will receive a 12.3% stake in Ninety One. The terms include that Ninety One be the primary active asset manager for the assets held by Sanlam Life and Sanlam Developing Markets.
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