One of the City’s leading fund managers is plotting a deal to buy out the £25bn asset management arm of Old Mutual, the Anglo-South African financial services group.
Sky News can exclusively reveal that Richard Buxton, the former Schroders star who joined Old Mutual Global Investors (OMGI) four years ago, is talking to private equity firms about a takeover of its third-party fund management business.
Mr Buxton, who is one of the City’s most prominent figures, is said to have been approached by investors including TA Associates, a former backer of Jupiter Asset Management.
TA is thought to be the frontrunner to lead a deal, although banking sources said this weekend that advisers at Goldman Sachs is expected to canvass interest from other potential bidders?.
The prospective sale of OMGI’s funds arm will not include the multi-asset unit which manages about £11bn for the FTSE-100 group, according to a source.
Both the timetable for a sale process and the value of the OMGI unit being sold are unclear.
If the deal does take place, it would leave Mr Buxton in charge of one of the City’s most influential fund management businesses.
He joined OMGI in 2013 and then became chief executive of the division two years later.
Talks about a deal come as Old Mutual pursues a radical four-way break-up revealed by Sky News last year.
The company is being split into four parts, comprising South African lender Nedbank; a US-based asset management business in which Old Mutual’s stake will be sold down to 6% later this year; Old Mutual Wealth, which is the unit in which OMGI sits; and Old Mutual Emerging Markets.
Bruce Hemphill, the group’s chief executive, is unusual among big company bosses in pursuing a strategy which will lead to him effectively losing his job once the break-up is complete.
He has enjoyed the support of investors for the move, however, as he seeks to unlock the valuation discount typically suffered by conglomerates.
“I don’t think it was particularly badly managed or poorly put together, there was just no sense in the structure,” Mr Hemphill told The Times this week.
Established in Cape Town in 1845, Old Mutual has endured speculation for years about its corporate structure.
Mr Buxton’s move to lead a buyout of OMGI’s third-party business will attract huge attention in the City given his high profile.
He is one of a small band of star managers whose influence grants him rarefied? access to company boardrooms.
It is unclear what the business he will lead will be called, since Old Mutual’s name will only remain attached to its South African operations.
If the sale does take place, it will be the latest in a string of significant deals in the asset management industry this year.
The biggest was the £11bn merger of Aberdeen Asset Management and Standard Life, which completed last month.
Old Mutual and Mr Buxton both declined to comment.
Source: Sky News