LIFE insurer Old Mutual Emerging Markets (Omem) may eye a listing as soon as 2018 to fund its growth ambitions, after parent Old Mutual Plc announced on Friday that it and three other core business units would be separated into independent entities.

The decision follows a "comprehensive" strategic review Old Mutual CEO Bruce Hemphill began when he joined the company in November.

In an interview after the release of Old Mutual’s results for the year to December, Omem CEO Ralph Mupita said the review recognised that his organisation — the second-largest unit after Nedbank in terms of profits — was in a growth phase, and required substantial investment. For now, it was using retained earnings to fund growth, he said. But, in future, it may want to have recourse to the market. Mr Mupita said the separation of the business entities would be "substantially" complete in two to three years — indicating a possible listing in 2018.

Mr Hemphill said the group had a number of options available to achieve the managed separation of its business units, which would be done in a manner that "maximises shareholder value over time".

"That may involve equity market activity for Omem.

"We will be able to give an update as to the route we will be taking in the last quarter of the year," Mr Hemphill said.

While two other business units, Nedbank and OM Asset Management, are already listed, questions hang over Old Mutual Wealth, into which the group has invested significantly.

The recent takeover of investment manager Quilter Cheviot is starting to reap dividends. For the 10 months it was part of the group, the company contributed £34m of Old Mutual Wealth’s £307m in profits — which rose 35% on the previous year.

"Old Mutual Wealth is a fantastic business, in which we have invested significantly, and are still investing in," Mr Hemphill said.

He would not comment on a Sky News report that private equity firms Cinven and Warburg Pincus had tabled a joint offer for the wealth business, but confirmed that the managed separation process might involve some "equity market activity" for the unit.

On what prompted the strategic review, Mr Hemphill, who previously led rival insurer Liberty, said he had watched from afar as Old Mutual evolved through a number of phases.

"Although it was clear to me that the underlying businesses were strong, the group has consistently traded at a substantial discount to its peers and to its sum of the parts valuation," he said.

On Friday, Old Mutual’s share price, at R40, trailed that of rivals Sanlam, Liberty, and Discovery, which closed the day at R59.62, R130.08, and R112.50, respectively.

The group reported £1.7bn in pretax adjusted operating profits, which rose 11% in constant currency, and 4% in the group’s reported currency. Basic earnings per share rose 2.42% to 12.7p.

Omem contributed £615m to Old Mutual’s adjusted operating profit.

Mr Hemphill’s separation strategy also involves a reduction of Old Mutual Life Assurance Company’s 54% stake in Nedbank to a strategic minority stake. Old Mutual Life Assurance Company is an Omem subsidiary.