Old Mutual Wealth has recorded “robust” net inflows in the first half of 2016 of £3.2bn an increase of 39 per cent from the same period in 2015.
The half year results from parent company Old Mutual show that within Old Mutual Wealth’s investment division Old Mutual Global Investors (OMGI) recorded £1.6bn of net inflows in the period, primarily into the Global Equity Absolute Return fund, North American Equity fund and the Cirilium range while Quilter Cheviot received £400m of net inflows.
OMGI’s funds under management have grown to £27bn, while Quilter Cheviot has seen its funds under management grow to £19bn at the end of June, bringing the overall Old Mutual Wealth assets to £111.2bn.
In spite of this, the results show adjusted operating profit for the business, which is in the process of being ‘demerged’ from parent company Old Mutual, fell 31 per cent to £104m compared with £151m for the same period in 2015.
The statement noted: “Despite weaker markets for most of the period, funds under management grew 7 per cent due to £3.2bn of net inflows over the period and market gains that took place in late June 2016 following the UK’s EU referendum result. Underlying performance in our “Invest & Grow” business has been satisfactory, delivering underlying organic growth in volatile market conditions. Within OMGI we have seen lower performance fees during H1 2016.
“Whilst reshaping and strengthening our executive committee we incurred £5m of restructuring costs in H1 2016. Additionally, we have incurred £2m of costs associated with the managed separation activity and continued to invest in governance and controls.”
Looking ahead, it stated: “Within OMGI, we will continue to develop our multi-asset offering and appraise opportunities to broaden our asset management capabilities as they arise. We anticipate continued equity market and currency uncertainty as the impact of the UK’s exit from the EU is worked through, and in the run up to the US presidential elections later in the year. Much of our fee income is derived from charges on funds under management and a fall in markets in 2016 would constrain projected earnings.”
Meanwhile parent company Old Mutual stated it was making “good progress” with the managed separation of its businesses, which is expected to be materially completed by the end of 2018.
As part of this it revealed the restructuring of the London head office had identified “a further reduction of headcount by up to 60” by the end of the year, This will result in a 50 per cent reduction in staff from the head office leading to “run rate savings of £10m”. Although it acknowledges “we would anticipate further headcount attrition influenced by how the managed separation progresses”.
