Published: March 14, 2013
Management team at South African firm to spend £190mn on 15% stake in business.
The senior management team at South Africa’s Investec Asset Management has agreed to take a 15% stake in the business in a £180mn (US$268mn) partial management buyout from the Investec group.
The deal will see Forty Two Point Two, a buyout vehicle for chief executive officer Hendrik du Toit and 39 other Investec Asset Management employees, take the stake using £90mn of equity funding and £90mn of debt from HSBC and the Investec group.
The management team will also have the right to buy a further 5% of the business during the next seven years, with other employees invited to join the buyout team for any further transaction.
A statement announcing the deal to the Johannesburg Stock Exchange noted that Investec’s wealth and asset management businesses now contribute about 40% of the group’s profits and that incentivising the management team through a buyout will “enhance the long-term success and growth prospects of Investec Asset Management”.
The deal has yet to be put to shareholders. If approved, the bank’s management team expects it to close by the end of July.
Goldman Sachs is advising Investec, while Fenchurch Advisory Partners and HSBC are advising Investec Asset Management.