Old Mutual has confirmed it plans to separately float Old Mutual Wealth on the London stock exchange.
The company announced plans to separate its four divisions in March.
This included its UK-based wealth division, which is made up of advice network Intrinsic, discretionary fund manager Quilter Cheviot, asset manager Old Mutual Global Investors and the Old Mutual Wealth platform.
In May, the Financial Times reported that as part of this separation Old Mutual Wealth would be floated separately from the South African parent company by 2017.
Old Mutual confirmed that it planned to push ahead with a separate listing for its wealth division in an announcement to the stock market this morning.
It said that it planned to create two separate entities, listed in London and Johannesburg, and that these would be offered ‘into the hands of Old Mutual’s shareholders’.
As well as listing Old Mutual Wealth, the company intends to create a new company in South Africa for its emerging markets operations.
‘There are various means to achieve this outcome and we will update the market on the precise steps we intend to follow in due course,’ Old Mutual said.
The announcement added that the plan to float Old Mutual Wealth was still subject to change
‘The initial plans outlined below remain subject to change as a result of factors such as stakeholder consent and/or the readiness of the underlying businesses,’ it said.
‘Equally, we may receive approaches for some or all of our businesses. We will evaluate these carefully and rigorously, balancing the criteria of value, cost, time and risk relative to our broad stakeholder interests.’
Paul Feeney (pictured), chief executive of Old Mutual Wealth, said the decision showed the strength of the company’s vertically integrated proposition. This has seen it acquire advice businesses, most recently it acquired Newton-Abbot-based DQS Financial Management.
‘Today’s announcement is a clear endorsement of our vertically integrated strategy and the strength and readiness of our business for the next stage of our corporate journey,’ he said.
Brexit uncertainty
Old Mutual plc also plans to close its London head office as part of a strategic review into the business.
In its announcement it said that it had reduced the 240 full time staff roles at the office by 15%. It added it planned to reduce this further over the separation process.
Old Mutual group chief executive Bruce Hemphill warned the UK’s vote to leave the EU would have an impact on the performance of its businesses.
‘Increased market volatility following the referendum decision to leave the EU does not affect our strategy although it may impact the performance of the underlying businesses,’ he said.
The company also said that plans to cap exit fees on older pension contracts would lead to ‘one-off expenses’ for Old Mutual Wealth this year.
Old Mutual will hold its annual general meeting later today, where shareholders will vote on a remuneration package for Hemphill and other senior staff which could see the chief paid £9 million if the separation is completed by 2018.
Source: New Model Adviser