Investec plc · LSE:INVP
Investec — Merger or Acquisition (April 2023)
16 slides from Investec's merger presentation, Apr 4, 2023
Slide 1: Creating the UK's Leading Discretionary Wealth Manager
Creating the UK’s Leading Discretionary Wealth Manager Combination of Investec Wealth & Investment UK and Rathbones 4 April 2023
Slide 2: Overview of key transaction terms
Overview of key transaction terms Combination ▪ Investec Group will own a 41.25% economic interest in the Enlarged Rathbones Group, with voting rights capped at 29.9%(1) Terms and ‒ Implies an equity value for Investec W&I UK business of £839m(2) Pro-Forma Ownership ‒ Transaction perimeter excludes
Slide 3: Compelling strategic rationale
Compelling strategic rationale Combination creates the UK’s leading discretionary wealth manager with c.£100bn in FUMA(1) ▪ Scale and operating efficiencies to power future growth ▪ Enhanced client and employee proposition ▪ Increased investment in capability and technology Creates a long-term strat
Slide 4: Financial benefits
Financial benefits Delivers significant value creation, with at least £60m of pre-tax cost and revenue synergies(1) Delivers earnings accretion(2) for Investec Group shareholders Material cost saving in respect of Investec W&I UK’s planned technology spend through leveraging Rathbones’ recent digita
Slide 5: Creates the leading UK discretionary wealth manager
Creates the leading UK discretionary wealth manager Market Rankings Enlarged Rathbones Group FUMA Based on Discretionary FUM Based on Mandate ~£100bn 6% 7% ~£20bn ~£20bn from Investec W&I UK non-discretionary FUMA, Rathbones Funds and Saunderson House FUMA 5% ~£80bn c.£100bn £60bn FUMA £52bn £50bn £
Slide 6: With an attractive and diversified client proposition
With an attractive and diversified client proposition FUMA by Mandate(1) FUMA by Mandate(2) 10% 4% 3% 11% 7% £39.7bn £60.2bn (3) 87% 78% Discretionary Advisory Single strategy funds Execution-only (4) 325 45 15 352 72 131 15 Investment Financial UK and CI Investment Financial IFAs through UK and CI
Slide 7: Attractive long-term commercial partnership arrangement
Attractive long-term commercial partnership arrangement Enlarged Rathbones Group client access to Investec Group banking services Discretionary Investment Banking Management Provision of selected operational services Financial Planning, Tax, Ethical Foreign Exchange and Offshore investments Credit A
Slide 8: Meaningful value creation with at least £60m of run-rate synergies
Meaningful value creation with at least £60m of run-rate synergies Total Annualised Synergies on a Cash Basis (pre-tax) 1 Technology platform and operations ~£18m 2 Key Synergy Components Other operational efficiencies ~£32m 3 Revenue synergies(2) ~£10m Expected to result in at least £60m(1) of pre-
Slide 9: Financial impact and outlook for Investec Group
Financial impact and outlook for Investec Group ▪ Increases contribution of capital light recurring earnings Earnings ▪ Expected to be marginally earnings accretive in the first full financial year post-completion, and earnings accretive thereafter as synergies are delivered (based on adjusted EPS)
Slide 10: Summary
Summary Compelling strategic and financial rationale Key Takeaways Fully aligned with Investec Group strategy ▪ Class 2 transaction for Investec Group and Class 1 transaction for Rathbones ‒ Publication of Rathbones Prospectus and Circular in Q2 2023 ‒ Rathbones shareholder vote to be sought at a Ge
Slide 11: Appendix
Appendix 11 Confidential | Investec
Slide 12: Overview of Rathbones
Overview of Rathbones Closing Total FUMA(1) (£bn) Fund Type by Value (%) Size of Client Relationship by Value (%) (Dec-22) (Dec-22) 5% 68 13% 20% 11% <£250k 60 55 £250k - £500k 50 10% Private Clients 10% £500k - £750k Intermediaries 10% £750k - £1.5m £1.5m - £5.0m Charities & COP 18% £5.0m - £10.0m
Slide 13: Historical financial information
Historical financial information Investec W&I UK 12 months to 31-Mar-2020 12 months to 31-Mar-2021 12 months to 31-Mar-2022 6 months to 30-Sep-2022 Closing FUMA £32.8bn £41.3bn £43.7bn £39.7bn Net Organic Flows £0.5bn £1.1bn £1.2bn £0.4bn Organic Growth Rate(1) 1.3% 3.4% 2.9% 2.0%(2) Operating Incom
Slide 14: Summary of Enlarged Rathbones Group shareholder arrangements
Summary of Enlarged Rathbones Group shareholder arrangements Pro Forma Shareholder Structure Key Relationship Terms Investec Group Other Enlarged Rathbones Group ▪ Two new Investec Group representatives to join the Enlarged Shareholders Rathbones Group Board on completion Economic rights Economic ri
Slide 15: Opportunity to leverage Rathbones' investment in technology
Opportunity to leverage Rathbones’ investment in technology ▪ Rathbones’ technology infrastructure will be readily scalable over larger business base at pace, offering: ▪ Highly regarded MyRathbones app and portal Clients ✓ A modern technology platform ▪ Digital communication and ease of doing busin
Slide 16: Disclaimer
Disclaimer This document regarding Investec Wealth & Investment Limited (the “Company”) the information and data herein and any attachments (including any e-mail that accompanies it) (together “this Document”) has been prepared by Investec plc (“Investec”) in connection with the proposed all share c