OLD Mutual shares hit a new 52-week high of R25.25 on Wednesday as the insurer announced it had completed the sale of five of its US asset-management affiliates for an undisclosed amount to senior management teams.
The company’s share price closed 2.82% higher at R25.18.
The sale completes the restructuring of its US asset-management business. The company had previously said the transaction would improve Old Mutual Asset Management’s margin this year and "result in the return of more than $100m of seed funding to reinvest in the business".
Old Mutual had previously said that before it considered listing its US asset-management business, it was important that there was an improvement in margins, positive net client cash flow and correct market conditions.
The JSE- and London-listed insurer, headed by Julian Roberts, said the five affiliate asset managers being disposed of were 2100 Xenon Group, 300 North Capital, Analytic Investors, Ashfield Capital Partners, and Larch Lane Advisors. These had combined assets under management of $12bn at the end of September last year compared with $11.7bn in June.
The sale leaves Old Mutual Asset Management with nine affiliate asset managers. On its website it lists Acadian, Barrow, Hanley, Mewhinney & Strauss, The Campbell Group, Copper Rock Capital Partners, Echo Point Investment Management, Thompson, Siegel & Walmsley LLC, Rogge, Investment Counselors of Maryland, and Heitman.
Old Mutual spokesman Patrick Bowes could not disclose the value of the sale of the five affiliates, only saying: "Any consideration will reflect the small size of these businesses."
He said the company could participate in the future prospects of these businesses.
Old Mutual believed the five affiliate asset managers were better placed as independent entities owned and managed by employees.
As part of the restructuring of its US asset-management business, Old Mutual sold Dwight Asset Management to Goldman Sachs in February last year for an undisclosed amount. It also sold Old Mutual Capital to Touchstone last year.
Apart from its asset-management businesses, Old Mutual sold its Nordic business for $3.2bn in cash in 2011.
Last year, Old Mutual met its debt reduction target of £1.5bn after some asset disposals.