Old Mutual confirms business carve-up


Old Mutual has confirmed plans to separate its four businesses, including Old Mutual Wealth, following a strategic review.

In its results statement published this morning, Old Mutual confirmed earlier reports that it will be looking to split its business along four lines: Old Mutual Wealth, South African lender Nedbank, the South African Old Mutual Emerging Markets business and its US institutional asset management arm OM Asset Management.

The results say: “The managed separation of the group will be effected in a manner that maximises value to shareholders over time, Nedbank and OM Asset Management (US) are already publicly traded and the managed separation may involve equity market activity for Old Mutual Wealth and Old Mutual Emerging Markets as well.”

Private equity firms Cinven, the majority shareholder in Partnership, and Warburg Pincus are believed to have tabled a joint cash offer for Old Mutual Wealth.

It comes as Old Mutual Wealth made an adjusted operating pre-tax profit of £307m, up 25 per cent to the £227m profit posted in 2014. The profits do not take into account the acquisition of discretionary manager Quilter Cheviot in February last year.

The platform business made a profit of £33m in 2015, up 74 per cent from £19m the previous year. Funds under management on the platform went from £30.8bn to £34.5bn.

Advice network Intrinsic has grown adviser numbers from 930 to 1,230 , helped by the acquisition of Sesame Bankhall’s Financial Adviser School in January. Overall adviser numbers, including mortgage brokers and protection advisers, stand at 3,380 advisers, up from 3,050.

Old Mutual Global Investors made a profit of £71m, more than doubling from 2014’s £33m profit. Assets under management have gone from £21bn to £24.7bn, while Quilter Cheviot accounted for a further £17.8bn in AUM.

Old Mutual Wealth chief executive Paul Feeney says: “Old Mutual plc’s announcement today is a great endorsement of our successful business strategy. We have a very exciting future ahead of us.

“We have solid foundations in place to support the next stage of our journey. Our vertically integrated business strategy is now delivering results for our customers and shareholders.  It is this strategy which truly differentiates us from our industry peers.”