Forty Two Point Two is an investment holding company, domiciled in Mauritius for over eight years. It was established as an investment vehicle through which key employees and senior management of Ninety One built a long-term investment in the founder-led global investment manager. Currently, Forty Two Point Two only invests in the dual listed shares of Ninety One, with a 21.85% equity stake (as at 31 March 2021) in the combined entity.
Ninety One was founded in South Africa nearly 30 years ago and has been organically and sustainably grown into a global player with approximately GBP128.6bn in AUM as at December 2020. Ninety One was initially founded as Investec Asset Management, operating independently within the broader Investec group. In March 2020, the entity demerged from Investec, rebranded as Ninety One and was separately listed on the London and Johannesburg Stock Exchanges.
Ninety One has a market leading position in its Southern African operations, while also reflecting material geographic diversification in developed regions such as United Kingdom (“UK”), Europe, and North America. Furthermore, the client grouping is well spread across pension funds, public authorities, official institutions, insurance companies, private banks, wealth managers and corporates having been built up on the back of a long standing track record and good market acceptance/branding within the core markets. Ninety One also has a good product mix, with offerings across four asset classes.
Given the regional diversification of the revenue source, net ungeared balance sheet and good track record of income stability, it is our view that Forty Two Point Two can sustain its current credit profile over the next 12-18 months, underpinning the stable outlook. While there are plans to slightly raise debt levels in the short term, serviceability is still expected to remain manageable with ample headroom provided by strong earnings, as well as the quantum and liquidity of the investment portfolio, even under a conservatively stressed scenario.