Old Mutual Wealth saw net inflows fall 60% to £900 million in the third quarter of 2016, as its parent company reiterated its intention to float the UK-based business by 2018.
Last month a Bloomberg report suggested that Old Mutual plc would sell Old Mutual Wealth rather than list it separately on the London Stock Exchange, due to concerns about a £450 million bill for platform technology changes.
An update to the market published today indicated Old Mutual Wealth would still float in London by 2018 as originally planned.
‘The announced target date for the material completion of the managed separation is by the end of 2018,’ it said.
The announcement added there was ‘no certainty’ about the outcome of the separation as Old Mutual may receive a bid to buy different parts of the company, or segments may not be ready to float by 2018.
Old Mutual plc added that as part of the process it would review ‘businesses and operating models, capital and governance structures, and management’ at Old Mutual Wealth and American entity Old Mutual Asset Management.
The update revealed that net inflows for Old Mutual Wealth fell to £900 million in the three months to 30 September, compared to £2.3 billion in the same period in 2015.
Old Mutual Wealth attributed the drop to market volatility around the EU referendum in June, and an ‘exceptional quarter’ for pension inflows in the third quarter of 2015.
For the nine months to 30 September net inflows were £4.1 billion, compared to £4.6 billion in 2015. However, gross sales for the first nine months of 2016 rose by 9% to £16.7 billion, compared to £15.3 billion last year.
In total Old Mutual Wealth had £119 billion of assets under administration at the end of September 2016.
Paul Feeney (pictured), chief executive of Old Mutual Wealth, said there were signs that customers were beginning to feel confident again follow the referendum.
‘We expect markets to remain difficult for some time given the uncertain conditions surrounding the UK’s exit from the EU. We are seeing early signs that our customers are regaining confidence and returning back to risk assets, albeit tentatively,’ he said.
Source: City Wire