InvestmentsMar 11 2016

Old Mutual to split into four businesses

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Old Mutual to split into four businesses

Old Mutual has confirmed the four parts of its business – Old Mutual Emerging Markets, Nedbank, Old Mutual Wealth and US-based UM Asset Management - will be separated following a strategic review.

The group said the “managed separation” of the group, announced in its 2015 results, will be completed by the end of 2018 with the aim of maximising shareholder value.

Nedbank and OM Asset Management are already publicly listed but Old Mutual revealed the separation may involve “equity market activity” for Old Mutual Wealth and Old Mutual Emerging Markets as well.

Group chief executive Bruce Hemphill said: “The strategy we have announced today sets out a bold new course to unlock value currently trapped within the group structure. We have four strong businesses that can reach their full potential by freeing them from the costs and constraints of the group.”

He added: “Our new strategy will allow each business to have simpler access to capital markets to fund its growth more easily and be valued more appropriately, with more straight forward regulatory arrangements.”

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

“By putting client needs at the heart of our business strategy, Old Mutual Wealth has transformed from a standalone platform into an award-winning, next generation wealth management business.”

The company also announced its annual results for 2015, with net client cash flow for the group as a whole up 86 per cent to £6.9bn from £3.7bn in 2014, while pre-tax profits were up by 35 per cent to £307m.

In Old Mutual Global Investors (OMGI) net client cash flow increased by 40 per cent in 2015 to £3.5bn, while profits more than doubled to £71m, up from £33m in the previous year.

Funds under management in OMGI climbed 18 per cent to £24.7bn, it reported.

It highlighted “strong flows” from its UK platform, from Intrinsic advisers through the Old Mutual Cirilium portfolios range, and into the Old Mutual Global Equity Absolute Return fund and the Old Mutual UK Alpha fund run by Richard Buxton.