UPDATE 1-Investec to sell 10% of asset manager in March spin-off

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JOHANNESBURG/LONDON, Nov 29 (Reuters) - Anglo-South African financial services group Investec will sell about 10% of its asset management business, to be renamed Ninety One, when it is spun off as part of a demerger expected in March.

Investec announced the structural overhaul last year in a move intended to strengthen the asset management business and Investec's remaining banking and wealth operations.

In an update published on Friday, Investec said it plans to sell about 10% of Ninety One, which will be split between London and Johannesburg under a dual-listing.

The demerger, which requires shareholder approval, is expected to take place on March 13, it said.

Joint Chief Executive Fani Titi declined to say how much Investec hoped to raise from the share sale but said the move was aimed mainly at delivering long-term value and was in the interests of shareholders and clients.

"Shareholders will benefit from direct ownership of two attractive, independent businesses with management teams focused on long-term growth and value creation," he said.

He added that simplification of the group allowed for better focus and increased accountability.

London-listed shares in Investec, which manages more than 119 billion pounds ($154 billion) in assets, were down 2.3% at 0829 GMT. Its Johannesburg-listed shares were down 2%.

The company said Investec shareholders would receive one Ninety One share for every two Investec shares, both for its Johannesburg and London-listed stock.

Following the transaction, Investec expects about 55% of Ninety One to be held by existing shareholders, with 15% being retained by Investec and 20% being held by Forty Two Point, the investment vehicle through which the management and directors participate in the business.

The demerger, which follows similar moves by Prudential , Old Mutual and Deutsche Bank as fees fall and costs rise in the fund management sector, is expected to incur transaction costs of at least 56 million pounds.

Net proceeds of the share sale will be used to cover these costs as well as tax liabilities arising from the transaction while strengthening Investec's capital position and supporting its growth plans, the company said. ($1 = 0.7794 pounds) (Reporting by Emma Rumney in Johannesburg and Clara Denina in London Editing by Rachel Armstrong and David Goodman)