Old Mutual Wealth sells Single Strategy to TA Associates


Old Mutual Wealth sells Single Strategy to TA Associates

Published Date: 1970-01-01 | Source: Stephen Gunnion | Author: Stephen Gunnion

Old Mutual Wealth sells Single Strategy to TA Associates

Single Strategy didn't form part of the core multi-asset business which will be rebranded Quilter Investors next year

Old Mutual Wealth has sold its Single Strategy asset management business to TA Associates for around £600 million as it moves forward with the managed separation of its businesses.

TA, a global growth private equity firm, will pay £570 million in cash on completion of the deal with about £30 million to be paid between 2019 and 2021 as surplus cash associated with the separation from Old Mutual Wealth is released in the business. Ownership of the Single Strategy business is expected to pass to TA effective at the beginning of January, with all profit and performance fees generated this year for the account of Old Mutual Wealth. The Single Strategy business is run by renowned fund manager Richard Buxton and had funds under management of £25.7 billion at the end of September. Net client cash flow for the nine months to September was £3.5 billion, while adjusted operating profit for the six months to end June was £36 million, of which £17 million was performance-fee related. The majority of the current management team including Buxton will remain with the business.

Old Mutual Wealth says the sale of its Single Strategy business followed a strategic review ahead of the managed separation of Old Mutual's various businesses and the rebranding of Old Mutual Wealth as Quilter Investors and its proposed listing next year.

Old Mutual is dividing its businesses back into their component parts to create more value for shareholders. The London-listed financial services group says it plans to list a new South African holding company, Old Mutual Limited, on the JSE next year after the release of its full-year results. The new group will take a secondary listing in London and will retain a 19.9% strategic stake in banking subsidiary Nedbank, with the balance of its 54% stake being distributed to shareholders. It has already reduced its stake in its US asset management business and is in the process of unbundling its Old Mutual Wealth. The fourth unit, Old Mutual Emerging Markets, houses the group's insurance businesses in South Africa and across the rest of the continent.

Related article: Old Mutual on track for split as earnings rise

Old Mutual's shares closed 3.5% firmer at R38.12.

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