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England ’ s Sarah Hunter , Joe Launchbury and Mike Brown during the launch of the 2016 Old Mutual Wealth Series at Twickenham
Old Mutual agrees fund management deal with China
Old Mutual has agreed to offload 24.95 % in Old Mutual Asset Management ( OMAM ), its US-based funds business , to Chinese financial services firm HNA Capital for $ 446 million .
The deal is part of a longer term strategy to divide the company into four smaller , more focused businesses . The four parts will be Old Mutual Emerging Markets , Nedbank , Old Mutual Wealth and OMAM .
At the end of last year , OMAM had around $ 240 billion of assets under management . Old Mutual ’ s holding in the business will drop from 50.8 % to 25.9 %, meaning it will no longer own a majority of the business . The deal is being done in two parts : a sale of a 9.95 % tranche of OMAM shares held by Old Mutual at $ 15.30 per share , and a further 15 % at a price of $ 15.75 per share .
Bruce Hemphill , chief executive of Old Mutual , said : “ We are very pleased to announce this transaction which brings forward further realisation of value for Old Mutual . It represents another step in delivering our managed separation strategy and secures a strategic long-term investor for OMAM .”
James Ritchie , chairman of OMAM , added : “ We are pleased to welcome HNA Capital US as a new , supportive investor in OMAM . We remain focused on executing our growth strategy , which includes working collaboratively with our high quality affiliates to diversify their businesses and expand their global distribution opportunities , as well as acquiring new affiliates , to generate strong , longterm value for all of our shareholders .”
HNA Capital US chief executive Guang Yang said : “ OMAM is a diversified , at-scale multi-boutique asset management franchise with an attractive portfolio of high quality investment managers . We are pleased with our investment in OMAM and look forward to supporting OMAM ’ s continued growth .” Q
Standard Life to merge with Aberdeen
Standard Life and Aberdeen Asset Management are heading towards an £ 11 billion merger that will create one of the world ’ s industry powerhouses .
With management expecting to make cost savings of £ 200 million a year , Keith Skeoch , chief executive of Standard Life , said : “ We strongly believe that we can build on the strength of the existing Standard Life business by combining with Aberdeen to create one of the largest active investment managers in the world and deliver significant value for all of our stakeholders .”
Following the merger , which values Aberdeen at £ 3.8 billion , Standard Life chairman Sir Gerry Grimstone will become chairman of the combined business . Skeoch and Aberdeen boss Martin Gilbert will become co-chief executives of the new firm with Gilbert confirming : “ There will be some job losses where there is overlap .” Q
John Colley ’ s View See pages 26-27
Expert defends Lloyds increase in bonus pot
Professor Peter Hahn from The London Institute of Banking & Finance has defended the decision by Lloyds Bank to increase its bonus pot to £ 392 million , up from £ 353 million .
“ There is a lot of debate about bonuses ,” Hahn told Radio 4 ’ s Today programme . “ Some people in certain sectors don ’ t get them at all but bonuses are correct for a large part of the banking industry . It ’ s a risk management business and people have to take risks .
We want banks to lend to businesses that need money . There is a reward for risk success and there should be no reward for risk failure .
“ I think the problem we have had with the bonus world before is that people were getting them too easily or being assured of them but I think we are progressing into a better bonus world . In the greater scheme of banks giving out bonuses the investment banks are still in the billions . This increase ( at Lloyds ) is still a relatively modest sum .” Q
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