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Old Mutual confirms four business areas will be split

Old Mutual confirms four business areas will be split

Old Mutual Wealth chief executive Paul Feeney said it would be “silly” to rule out selling the company, which includes advice network Intrinsic, once it is spun out from its parent.

Paul Feeney was speaking after Old Mutual confirmed that the four parts of its business – Old Mutual Emerging Markets, Nedbank, Old Mutual Wealth and UM Asset Management – will be separated following a strategic review.

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

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Mr Feeney said the split was needed to address the issue of having four such different busineses lumped together under one umbrella.

“We are not just different geographic expressions of the same business, we are very different businesses in different markets selling different products and services to different client bases. The only communality is the sign above the door.

“When you say the four individual businesses have a separate future, then you have got to make that happen somehow.”

Tackling rumours over the sale of Old Mutual Wealth, Mr Feeney told FTAdviser: “I would be more concerned if no one was interested in our business. Old Mutual Wealth is a fantastic franchise, and if we were to go to market we would almost certainly be a FTSE 100 company in our own right.

“At the end of the day, my job as chief executive is to ensure we end up with the right ownership structure. We would be silly to rule anything in or out.”

He said they would need a “short period of time” following the announcement to reach a decision about ownership options, while reassuring advisers in Intrinsic and Positive Solutions that they would see no change as a result of the restructure.

While Mr Feeney declined to comment on market speculation, such as the rumours about Old Mutual Wealth buying Tenet, he did say that the company is looking to expand its reach among advisers.

“We believe fundamentally in adviser distribution and we are looking to grow in that area. We have now built the leading adviser distribution capacity in this country, and we continue to grow from there,” Mr Feeney explained.

“Our most important objective is that we serve our existing clients as best we can, but then we also want to build on that.”

Adviser view

Graeme Hood, a partner at Kent-based Closer Financial Partners, said his personal take on the restructure was that it is business as usual.

“We trust the guys in charge that everything will carry on as normal, and we like the things we hear from the top.

“We are well regulated, so if Old Mutual Wealth were to be sold it would be business as normal. Our contract is 30 days rolling, so every week we are being approached by networks and Intrinsic knows that.”