Investec Increased its Marketing Spending in 2010, Director Says

Investec Plc, a South African private bank and wealth manager that sponsors Britain’s richest horse race, increased its spending on marketing this year, a senior executive said.

“We are spending more,” Raymond van Niekerk, global head of marketing, said in an interview. “We’ve taken on some things that we hadn’t planned on, because the opportunity was right.”

The company is investing in its asset-management business to reduce its dependence on lending income and to conserve capital. The bank bought British fund manager Rensburg Sheppards Plc in March to expand the division. Investec stock has gained more than 19 percent this year in London, giving the company a market value of 4.1 billion pounds ($6.5 billion).

“In good times, we’ve not got too fat,” Van Niekerk said. “So when it comes to lean times, we don’t have to restructure and reinvent dramatically because we have a business model that caters for ups and downs in various cycles. So we can have a more smooth transition in marketing spend.”

Investec, which is traded in London and Johannesburg, last year replaced mobile phone company Vodafone Group Plc as the main sponsor of the Derby Festival held at Epsom Downs Racecourse south of London, in a five-year deal.

Investec, which has operations in South Africa, the U.K. and Australia, is involved in numerous sponsorships, ranging from rugby and cricket to cultural events such as concerts. It signed a two-year shirt sponsorship deal with Tottenham Hotspur soccer club in August while it also endorses a yacht in the Sydney Hobart Yacht Race.

Right Price

“A couple of years ago, we didn’t plan to do the Investec Derby, but we did it,” Van Niekerk said. “The opportunity was right, and the price was right and it was value for us and for Epsom.”

Staged in June, the Derby Festival is held in front of more than 100,000 spectators and attracts a worldwide television audience of 200 million people, according to its website.

The Epsom Derby, which dates back to 1780, is the U.K.’s richest flat race with winnings of 1.25 million pounds. Previous winners include Shergar and Sea The Stars, while this year’s race was won by Workforce.

Investec’s involvement with Epsom has paid off, Van Niekerk said.

“The media exposure far exceeds the cost of getting the brand over there,” he said.

The shirt deal with Tottenham “was not a planned thing,” Van Niekerk said. “We looked at a number of opportunities and the timing and the pricing and the value for both parties, it was a compelling argument so we took it. But it wasn’t like we woke up at the end of a budget year and said ‘OK, we are going to look for another sponsorship.’”

Van Niekerk doesn’t rule out any new sponsorship deals in the future.

“Life goes on as normal, but if something fantastic presents itself we’ve always been entrepreneurial and opportunistic about things that make a lot of sense,” he said. “So we don’t have our eyes closed. Our pockets are closed, but our eyes are not.”

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