Manager Research

Investec Limited's involvement in the Cum-Ex tax Investigation has recently resurfaced in the media. The Cum-Ex Tax Investigation is a name given to a large number of transactions that took place prior to 2012 in Europe. It involved exploiting a loophole in European tax law that enabled more than one party to claim the same tax refund.

Various banks and other financial institutions have been implicated in the probes over a number of years and recently, one of the banks implicated was Investec Limited.

Given Ninety One's history of being a part of Investec group before its demerger in 2020 and the fact that the transactions in question took place before the demerger took place, we have assessed to what extent Ninety One (formerly Investec Asset Management) was involved in the transactions. It is also important to note that Investec Limited has previously addressed concerns related to its involvement in the Cum-Ex Tax Investigation.

We have received written confirmation from Ninety One that confirms that they were not involved in this banking activity at any point. Secondly, none of the funds, instruments or investment strategies managed by Ninety One can be linked to the activities that are currently being investigated by authorities. Lastly, none of the trades that Ninety One entered into on behalf of clients were entered into with the sole purpose of claiming a dividend withholding tax refund.

We do not believe there is a material risk of Ninety One being linked to this issue and accordingly have not adjusted any fund ratings as a result. One of the reasons supporting the separation of the bank and the asset manager was to create a clear separation of businesses such that any significant events such as this would not impact the asset management business (now Ninety One) or underlying investors.