Old Mutual’s fund arm to go it alone after break-up

Old Mutual’s UK funds business will go it alone after the FTSE 100 giant, founded 170 years ago in South Africa, confirmed plans to break up its sprawling empire.

London-listed Old Mutual will cease to exist after it confirmed a plan to separate its four companies into standalone businesses.

One of those, the UK-based Old Mutual Wealth (OMW), will be sold to another company, likely private equity, or listed on the stock market as part of the plan.

The other three — Old Mutual Emerging Markets, Nedbank and Institutional Asset Management (IAM) — will also be separated.

Nedbank and IAM are already listed on the stock market, with Old Mutual owning majority stakes.

Few details emerged of how the break-up will work, but Old Mutual boss Bruce Hemphill said cuts could come at its London head office. His own role will disappear.

OMW, the UK arm, said the separation will allow it to stand on its own. Its boss Paul Feeney said: “The Old Mutual group has been incredibly supportive but there is very little synergy between my business and those in South Africa. We stand on our own. At the moment we have to share a corporate structure which is an overhead for us, but we are different companies.”

Old Mutual will cut its 54% stake in Johannesburg-listed Nedbank to a minority holding. Its interest in IAM, listed in New York as Old Mutual Asset Management, will also be offloaded.