Strategy

Old Mutual To List Wealth Arm

Amisha Mehta Deputy Editor London 29 June 2016

Old Mutual To List Wealth Arm

London-listed Old Mutual has unveiled demerger plans involving its wealth unit, which involve some job cuts and changes to its head office.

Old Mutual has confirmed plans to list Old Mutual Wealth as a separate entity on the London and Johannesburg stock exchanges through a demerger.

The separation of its emerging markets business will be achieved through the creation of a new South African holding company, which will retain a minority stake in Nedbank. 

As part of the changes, the group has reduced its full-time staff by 15 per cent, and will trim this further as the managed separation progresses, it said. 

The changes are also resulting in a "significant redesign of the head office", the firm said, and this will include transitioning activities to the underlying businesses and "managing the orderly and phased winding down of the London head office", according to a statement. 

Old Mutual will update the market on the precise steps it intends to follow in due course, it said yesterday.

The group announced plans for a “managed separation” in March, stating that this “may involve equity market activity” for Old Mutual Wealth and Old Mutual Emerging Markets. Shares in its other subsidiaries Nedbank and US-based OM Asset Management are already publicly traded.

The firm's chief executive, Bruce Hemphill, said increased market volatility following the UK's decision to leave the European Union does not affect the group's strategy although it “may impact the performance of the underlying businesses”.

“The expected headwinds of weaker and more volatile foreign exchange and equity markets have materialised. However, the average value of the rand year-to-date 2016 has decreased by 22 per cent as compared to the first half of 2015. We continue to keep operational management focused on maximising returns,” he said.

“We are working intensively with the businesses to prepare them for separation. We remain confident that the managed separation process will lead to the creation of shareholder value, and strong businesses for our customers, staff and other stakeholders.”

Old Mutual Wealth's CEO, Paul Feeney, added: “It is our expectation that the outcome of the EU referendum vote will continue to drive increased levels of market volatility. Our focus is on our customers, on managing their assets and helping them navigate through these uncharted waters. We will not lose our focus on this task.”

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