Old Mutual fails to settle queries

Question marks hang over the value of Old Mutual Wealth, which is rebranding and heading for both the JSE and London Stock Exchange as Quilter plc in 2018, as parent Old Mutual failed to settle questions about a large chunk of its business at an investor showcase on Wednesday.

Question marks are hovering over the final shape of Old Mutual Wealth — which is rebranding and heading to the JSE and London Stock Exchange as Quilter plc in 2018 — as parent Old Mutual failed to settle questions about a large chunk of its business at an investor showcase on Wednesday.

The insurer appeared to confirm a split within its wealth subsidiary Old Mutual Global Investors (OMGI), when the single-strategy business, which managed £23.5bn in assets by the end of June and is led by superstar fund manager Richard Buxton, was left out of the showcase. Instead, Old Mutual Wealth presented OMGI’s multiasset business, which it now calls Old Mutual Wealth Investors and which manages assets worth £14.3bn. It also showcased its range of advice and wealth management proposition, with a collective £101.8bn in assets under advice.

Old Mutual said it was exploring “internal and external structures” to develop Buxton’s business further and could not say if it would be part of the listed Old Mutual Wealth-Quilter entity in 2018.

“Given we are assessing options with regard to OMGI, I won’t speculate. But South African investors will benefit from the Old Mutual Wealth business because they will become shareholders in Old Mutual Wealth,” said spokesman William Baldwin-Charles.

Rahima Cassim, portfolio manager at Ashburton Investments, said that OMGI was a significant part of Old Mutual’s wealth business.

“We can speculate as to the background issues, but we do not know for sure why it is that OMGI [single strategy] is not being integrated into the rest of the business currently with a rebranding strategy.

“Given that the managed separation is still ongoing, there is time for these issues to play out, so we will get clarity on OMGI at some point, so that a valuation of Quilter can be made including or excluding it.”