Old Mutual Wealth's proposed transaction follows its restructuring announcement in early September.

Old Mutual Wealth has agreed to sell its asset management business, Single Strategy, to its management team and funds run by private equity firm TA Associates, for about £600 million ($803.8 million) in cash.

Most of the Single Strategy management team, including chief executive Richard Buxton, will remain with the business.

The cash payment comprises a consideration of £570 million payable on or before completion, with approximately  £30 million anticipated to be payable thereafter, paid primarily in 2019 to 2021 as surplus capital associated with the separation from Old Mutual Wealth is released in the business, OMW said in a statement today. This deferred consideration is not subject to performance conditions.

When the transaction is completed, economic ownership of the business will pass to acquirers effective from 1 January 2018 with all profits and performance fees generated up until 31 December 2017 for the account of Old Mutual Wealth. 

The Single Strategy business had £25.7 billion of assets under management at the end of September this year. It also had a net client cash flow for the nine months to 30 September of £3.5 billion. Adjusted operating profits for the six months to 30 June 2017 were £36 million, of which £17 million were performance fee related.

The proposed transaction is subject to customary closing conditions, including regulatory approvals and conditions relating to the transfer of the multi-asset business to be retained by Old Mutual Wealth.
A number of operational and IT transitional service agreements have also been agreed for a period of up to two years from the date of the completion of the sale (covering the separation of the retained Multi-asset business from the Single Strategy business).

Old Mutual Wealth announced at the start of September it was creating the multi-asset business, and looking at different structures for the Single Strategy business to continue to develop it further. The agreement today follows a “rigorous review process”, which included interest from a number of market participants.

There is no change to the Old Mutual Wealth Multi-asset business, which will be rebranded as Quilter Investors during 2018. Led by Paul Simpson, CEO, this business is a core part of the Old Mutual Wealth strategy, the firm said.