Old Mutual has struck a deal to sell its single strategy asset management arm to private equity outfit TA Associates for £600 million. It also includes approximately 30 million pounds anticipated to be payable thereafter, paid primarily in 2019 to 2021 as surplus capital associated with the separation from Old Mutual Wealth is released in the business. The single strategy business had £25.7bn of funds under management at the end of September and net client cash flow for the nine months to the end of September was £3.5bn.
Old Mutual's shares rose 4 percent on the news, to the top of Britain's FTSE-100 index.
TA Associates managing director Chris Parkin said: "We have followed the development of Old Mutual Global Investors' Single Strategy business for several years and have been impressed by what is clearly now a diversified and high-quality investment platform".
Buxton, one of the City's highest-profile fund managers, said: "The management team is delighted to be partnering with TA Associates to buy the single strategy business".
Old Mutual is planning to list the remaining United Kingdom multi-asset business of Old Mutual Wealth next year, as it looks to break itself into four parts by the end of 2018.
The proposed transaction is subject to customary closing conditions, including regulatory approvals and conditions relating to the transfer of the Multi-asset business to be retained by Old Mutual Wealth. He added today's sale announcement is a "good outcome" for shareholders.