Ninety One PLC and Ltd on Wednesday reported a dip in interim profit and announced that it had entered into an agreement that will see Sanlam Ltd appoint Ninety One as its primary active investment manager.

The London and Cape Town-based money manager posted pretax profit of £93.3 million for the first six months that ended September 30, down 10% from £104.0 million a year earlier.

Revenue for the first half was down 2.1% to £343.0 million from £350.2 million.

Ninety One said net outflow was £5.3 billion for the first half to September 30, down 44% from £9.4 billion in the second half that ended March 31. For the first six months to September 30, net outflow was £4.3 billion.

Assets under management was £127.4 billion on September 30, up 1.1% from £126.0 billion on March 31.

Ninety One cut its interim dividend to 5.4 pence, down 8% from 5.9p, following lower earnings. Earnings per share fell 12% to 7.8p, compared to 8.9p.

Going forward, Ninety One said it was encouraged an environment of lower interest rates, broadening markets and an improving new business pipeline.

In a joint statement, Ninety One and Sanlam on Wednesday announced they had reached an agreement that will see Sanlam appoint Ninety One as its primary active investment manager.

Under terms of this agreement, Ninety One will acquire all the issued shares in Sanlam Investment Management Pty Ltd, an active investment management business wholly owned by Sanlam Investment Holdings Ltd, in which the Sanlam holds an effective 65.6% interest.

Sanlam will appoint Ninety One as the permanent investment manager to manage assets for Sanlam Investments UK Ltd, a wholly owned subsidiary of Sanlam.

In addition, Sanlam will serve as an anchor investor in Ninety One’s international private and specialist credit strategies that meet its investment requirements.

The Cape Town-based diversified financial services company will receive about 12.3% equity stake in Ninety One through a combination of Ninety One Ltd and Ninety One PLC shares, making it a long-term shareholder of Ninety One, which has a market capitalisation of £1.01 billion.

Ninety One shares in London rose 2.6% to 166.20 pence on Wednesday morning. Ninety One Ltd shares rose 2.9% to R 38.21 in Johannesburg. In Johannesburg, Sanlam stock was up 0.4% to R 88.86 on Wednesday morning.

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