Old Mutual Global Investors, part of Old Mutual Wealth, has seen its profits more than double to £33m in 2014, from £15m the previous year.
This includes £2m from Cirilium, the fund range at the centre of Intrinsic’s investment proposition which is now managed by OMGI following the acquisition by Old Mutual Wealth.
OMGI also recorded gross sales of £9.2bn during the year, helping to push its funds under management to £21bn a 31 per cent increase from £16bn at the end of 2013.
The Global Equity Absolute Return (GEAR) fund was OMGI’s top selling fund in 2014 with sales of £1.7bn, followed by Richard Buxton’s UK Alpha fund with sales of £1.1bn.
Julian Ide, OMGI chief executive, said even without the profit boost from the Intrinsic purchase, organic profit growth was roughly 100 per cent.
Mr Ide acknowledged while it was a “big jump” it was “not out of line with what we expected”.
A big contributing factor was bringing the management of several funds in-house as opposed to paying third parties to run funds for them.
Examples include Asian equities, where the group has hired Joshua Crabb, previously at BlackRock.
Mr Ide said he did not expect the level of insourcing to continue given it had “largely been completed”.
In spite of the large growth in profits, Mr Ide said the group could still deliver strong numbers in 2015 and ahead.
“I feel in many ways we are in the foothills of our journey,” he said.
“I am really chuffed with these results but there is no sense in which I feel we are there or even at the first base camp.”
Mr Ide said there was “a lot of expansion capacity in the business”, part of which will come from its offshore business which he said had been “quietly restructured”.
The group this week received approval to run money out of Hong Kong, Mr Ide said, as part of its “quite aggressive” offshore strategy.
In its preliminary results statement Old Mutual Wealth, which owns Intrinsic and Quilter Cheviot as well as OMGI, recorded a 5 per cent increase in AOP to £227m, while its total funds under management rose to £82.5bn following a “growing demand for customer focused investment solutions” since the introduction of the RDR.
Old Mutual Wealth’s UK platform also saw its assets rise by 13 per cent to £30.8bn by the end of 2014, while profit increased by £6m to £19m in the year, with gross sales of £5.1bn. Meanwhile the WealthSelect investment service, which was launched in February 2014, recorded £800m of sales during the period.
Meanwhile Old Mutual Wealth’s parent company, Old Mutual, noted in its results statement that as the RDR “is encouraging financial advisers to switch from independent to restricted advice, so the need for investment providers to have their own distribution network is becoming increasingly important. Additionally, financial advisers are focusing on providing financial planning and pensions advice and outsourcing investment management to discretionary investment managers”.
It noted that these changes to the industry “provide a compelling opportunity for businesses which have the right customer offering”.
