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, long-term 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.”