Investec may sell Rensburg fund division
SOUTH African bank Investec yesterday said it had brought in advisers to explore the possibility of hiving off the fund management division of Rensburg Sheppards, which it bought out fully at the end of March.
Investec said it had received “a number of expressions of interest” from potential buyers for Rensburg Fund Management (RFM), which accounts for just under a tenth of Rensburg Sheppards’ total funds under management.
It has hired Fenchurch Advisory Partners to look at strategic options for selling the fund management arm, which could fetch anywhere between £30m and £40m based on the price Investec paid to gain full control of Rensburg earlier this year.
Analysts said that a sale of RFM would be a “natural demerger” for Investec, given that Rensburg’s primary business is concentrated on private client discretionary wealth management services rather than fund management.
As of its final results in May, RFM had £1.3bn of funds under management, compared with £11.6bn under management at Rensburg’s investment management arm. However, the division has since lost its single segregated mandate and disposed of its corporate bond trust, meaning it now manages around £800m.
Investec stressed there could be no certainty that Fenchurch’s strategic review would result in a transaction or offer for RFM.
The bank, which already held a long-term 47 per cent stake in Rensburg, stumped up a hefty premium in March to acquire the remainder of the group. It paid 1.63 new shares of its own for each Rensburg share, valuing the firm at around £412m. The offer valued Rensburg’s shares at 916p, a 48 per cent premium to their closing price the night before the deal was announced.