Private equity firm snaps up £25bn chunk of Old Mutual funds unit

FINANCE giant Old Mutual has agreed to sell a £25bn chunk of its fund unit run by City veteran Richard Buxton to the former owner of Jupiter Asset Management.

Private equity group TA Associates has agreed to buy the firm’s singlestrategy funds business, which will continue to be run by Mr Buxton, for £600m ahead of Old Mutual Wealth’s stock market float due next year. The business focuses each fund on one type of asset.

The deal ends weeks of bidding for the business after Goldman Sachs was hired to drum up interest from potential investors. It is understood that Australian bank Macquarie was also vying to take over the division, which has assets of around £25.7bn. “The process was run in tandem with more than one party but this was the best bid in terms of execution, price, risk, structure,” a spokesman said.

TA Associates has a history of investing in asset management businesses, buying Jupiter in a management buyout in 2007 before selling its stake in the British fund manager in 2014. Its deal with Old Mutual, which will not involve the sale of its multi-asset division, is the latest to take place in the sector this year.

Others include the £11bn merger of Aberdeen Asset Management and Standard Life, the $6bn (£4.5bn) tie-up between Henderson and Janus, and the merger of Prudential’s UK asset management arm and European insurance unit. The majority of those currently running the single-strategy business will move with it. Mr Buxton joined the FTSE 100 group from Schroders four years ago and has run the asset management unit for two years.

Paul Feeney, chief executive, said: “The single-strategy business is less closely aligned to our goal of becoming the UK’S leading wealth manager.” The takeover comes as the Anglo-south African group presses ahead with its break-up plans. It is selling down its stake in the South African lender Nedbank to 20pc and has already agreed to sell its Us-listed asset management business. Old Mutual Wealth will be floated next year while Old Mutual Emerging Markets will be spun off.