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Old Mutual eyes UK life firms with 1bn war chest

Old Mutual has its sights on a UK life insurer as it looks to spend a 1bn war chest to build its market share.

The South African firm has made it clear that it only wants to do one market deal and is waiting until an appropriate business is available.

Old Mutual says it wants to create a third leg to its UK business. It has a successful asset management arm in the UK but it represents just 3 per cent of overall profit. South Africa produces 66 per cent of its profits and the remaining 31 per cent comes from the US.

In August, Old Mutual said it would consider bolstering its UK business after profits rose strongly in the first half of the year.

Profits rose by 21 per cent to 422m in the six months to June, primarily boosted by its US arm.

Earlier this year, Old Mut-ual looked at buying the life funds of Royal Sun All-iance, since sold to Resol-ution Life.

Analysts believe that Britannic Asset Management, a specialist in closed life funds, could be a potential match but Old Mutual denies that any suitable business has been found.

Communications manager Miranda Bellord says: “Bet-ween 750m and 1bn has been set aside. We want to expand in the UK but we have not yet found the right match for us.”

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