Old Mutual Wealth (OMW) has agreed to sell its Single Strategy business to TA Associates, global growth private equity firm, for an expected total consideration of £600m.
Once the transaction completes, economic ownership of the Single Strategy business will pass to the acquirer effective from 1 January 2018.
A cash consideration of £570m will be payable on or before completion, with approximately £30m anticipated to be payable thereafter.
The fund business will be appropriately capitalised to continue to implement its growth plans during this transitional ownership phase.
The majority of the current management team of Single Strategy business, including chief executive officer Richard Buxton, will remain with the company.
Richard Buxton, CEO of the OMGI, said: “I believe this is a good outcome for our customers and our staff. The management team is delighted to be partnering with TA Associates to buy the single strategy business.”
On 3 September 2017, OMW built the Multi-asset business, together with the exploration of internal and external structures for the Single Strategy business to continue to develop it further.
There is no change to the OMW Multi-asset business, which will be rebranded as Quilter Investors in 2018. Led by Paul Simpson, CEO, this business is a core part of the Old Mutual Wealth strategy, delivering leading investment solutions to a wide number of UK and international retail clients through Old Mutual Wealth’s significant distribution footprint.
OMGI currently has £25.7bn fund under management, primarily in high-conviction equity mandates. Once the sale is completed the remaining wealth business will have £106bn in client assets.
Paul Feeney, CEO of Old Mutual Wealth, said: “As we outlined in the Showcase event in November, the Single Strategy business is less closely aligned to our goal of becoming the UK’s leading wealth manager.
“I believe this development is a good outcome for our shareholders and provides the OMGI team with a great opportunity to build on the success they have achieved since 2012.”