South Africa’s biggest private asset manager announced today that its asset under management (AUM) dropped to £124.8 billion (R2.94 trillion) in June 2023.
This is a significant decline from a year before when it had £134.9 billion (R3.18 trillion) in AUM. In March this year, Ninety One had £129.3 billion (R3.05 trillion) in AUM.
Ninety One was formed as Investec Asset Management in 1991. It changed its name to Ninety One in 2020, the same year it was demerged from Investec. The firm is listed on both the Johannesburg and London Stock Exchanges.
It reported a record R254 billion net outflows in its 2023 financial year. The firm attributed this to an increase in risk-averse investors looking for safety and liquidity during market volatility.
“Investors went for safe havens. They didn’t come to us. In the second half of the year, we were not that much in demand regarding what we were selling,” CEO Hendrik du Toit told News24 at the time.
This came as a blow to the firm, which had just come off a record 2022 and many years of growth in AUM.
However, faced with rising inflation, interest rate hikes, geopolitical uncertainty, bank failures and energy shortages across the world, Ninety One’s AUM suffered.
News of the significant outflows and decline in AUM earlier this year has affected the firm’s share price on the London Stock Exchange, which has fallen by more than 9% this year.
A recent PwC survey found that asset managers worldwide are facing significant headwinds, and one in six asset and wealth management companies will be swallowed up or fall by the wayside in the next five years.
PwC found that these firms are currently facing the greatest AUM decline in a decade, as global assets under management fell to $115.1 trillion in 2022 – nearly 10% below the 2021 high of $127.5 trillion.
The survey identified inflation, market volatility, and interest rate movements as the biggest concerns for investors and asset managers over the next 12 to 24 months.
It said nearly three-quarters (73%) of asset managers are considering a strategic consolidation with another asset manager.
According to PwC, the top ten largest asset managers could control around half of mutual fund assets globally by 2027, up from 42.5% in 2020, with private markets to account for up to half of AWM revenues by 2027, up from 37.6% in 2020.