Old Mutual has not ruled out selling off its businesses as it begins a managed separation to extricate the four parts of the group.
In a market update today, Old Mutual outlined the “highly complex” nature of the managed separation, which will see Old Mutual Asset Management, Old Mutual Wealth, Old Mutual Emerging Markets and Nedbank separated and two businesses listed on the London and Johannesburg stock exchanges.
Old Mutual has begun reducing its 66 per cent holding in OMAM, with the completion of the managed separation slated for the end of 2018.
However Old Mutual says any plans are “subject to change” and that the firm “may receive approaches for some or all of its businesses” and “there can be no certainty as to the nature of the final outcome.”
Bruce Hemphill, chief executive of Old Mutual, says: “Old Mutual has four good businesses. We are now in the process of getting the unlisted entities of Old Mutual Wealth and Old Mutual Emerging Markets ready for independence. The managed separation process is acting as a catalyst for delivering long-term sustainable earnings and growth and positioning the underlying businesses to be great on a standalone basis.”
Old Mutual expects the closure of the head office in London to incur a standalone cost of up to £65m, while costs associated with listing OMW and OMEM could reach £10m per year. The managed separation costs for OMW in the second half of 2016 are expected to reach £10m.
Meanwhile Old Mutual Wealth has announced a drop in net flows of £1.4bn year on year for Q3 2016. For the three months to 30 September net client cash flow was £0.9bn, compared to £2.3bn in Q3 last year. However, funds under management rose from £104bn to £119bn over the same period.