The worst is over for South Africa’s largest asset manager

Ninety One’s earnings took a hit from muted investor risk appetite over the past six months despite positive markets working in the asset manager’s favour.

Ninety One released its results for the six months through September 2024 on Wednesday, which revealed a muted performance.

The asset manager’s closing assets under management increased by only 1% to £127.4 billion (R2.93 trillion). 

Ninety One also experienced net outflows of £5.3 billion (R121.75 billion), with the asset manager saying that demand for risk-on strategies remained muted in the first half of its 2025 financial year.

This saw Ninety One’s adjusted operating profit decrease by 9% to £88.6 million (R2.03 billion). 

Its adjusted operating profit margin decreased to 30.5%, down from 32.6% in the previous year. Profit before tax decreased by 10% to £93.3 million (R2.14 billion).

The company’s basic earnings per share decreased by 12% to 7.8 pence (R1.77), and adjusted earnings per share decreased by 11% to 7.3 pence (R1.66).

“During this reporting period, Ninety One benefited from positive performance in equity and bond markets,” CEO Hendrik du Toit said. 

“Demand for risk-on strategies, especially emerging markets, remained muted.” He said this affected the company’s ability to produce new business at historic rates. 

However, he noted that Ninety One has 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,” he 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.”

Interestingly, Ninety One noted that emerging markets outperformed the S&P during the reporting period.

In addition, net inflows were noted in actively managed emerging market funds in September, suggesting a potential turning point.

Demand in the multi-asset credit space is also building. This is supported by a significant investment in skills and systems, including key appointments. 

“We are excited about the prospects in this area,” Ninety One said. In addition, the asset manager noted that investment returns have improved relative to the previous year. 

“This helps to set us up to capture flows when they return to the parts of the market in which we operate,” it said.

“Since September, we have seen an improvement in flows and pipeline, which gives us confidence that the worst is behind us.”

“While market conditions remain uncertain, we are focused on the long term. With strengthened investment performance and a growing pipeline, Ninety One is optimistic about regaining business momentum and capturing opportunities in emerging and global markets.”

Ninety One declared an interim dividend of 5.4 pence (R1.23) per share.