Star City fund manager Buxton to lead £25bn Old Mutual buyout

0
39

The Anglo-South African financial services group, one of the leading fund managers in the city, is planning a deal to buy out the £25bn asset management unit of Old Mutual.

It was revealed by Sky News that the former Schroders star who joined Old Mutual Global Investors (OMGI) four years ago, Richard Buxton, is speaking to private equity firms regarding a takeover of its third-party fund management business.

One of the most prominent figures in the City, Mr Buxton is said to have been approached by various investors including a former backer of Jupiter Asset Management, the TA Associates.

TA is believed to be the frontrunner to lead a deal, although banking sources announced this weekend that advisers at Goldman Sachs are expected to canvass interest from other possible bidders‎.

According to a source, the proposed sale of OMGI’s fund’s arm will not include the multi-asset unit which controls about £11bn for the FTSE-100 group.

Both the value of the OMGI unit being sold and the timetable for a sale process are unclear.

Mr Buxton will be in charge one of the City’s most influential fund management businesses if the deal becomes successful.

Buxton joined OMGI in 2013 and later became chief executive of the division after two years.

Reports regarding a deal occur as Old Mutual attempts a radical four-way breakup revealed by Sky News in 2016.

The firm is being divided into four parts, including Old Mutual Emerging Markets; an asset management business based in the US in which Old Mutual’s stake will be traded down to 6 percent later this year; South African lender Nedbank; Old Mutual Wealth, which is the unit in which OMGI sits.

The group’s chief executive, Bruce Hemphill, is unusual amongst big company bosses in pursuing a plan which will lead him to effectively losing his position once the breakup has transpired.

However, as he attempts to unlock the valuation discount usually experienced by various conglomerates, he has enjoyed the investor’s support for the move.

“I don’t think it was particularly badly managed or poorly put together, there was just no sense in the structure,” stated Mr Hemphill in The Times this week.

Established in 1845 in Cape Town, Old Mutual has faced speculation for years concerning its corporate structure.

Given his high profile, the move of Mr Buxton to lead a buyout of the third-party business of OMGI will invite huge attention in the City.

He is one of a small group of star managers whose influence allows him rarefied‎ access to company boardrooms.

What the business he will manage will be named is still unclear, since the name of Old Mutual will only continue to be attached to its operations in South Africa.

The sale will be the latest in a string of significant deals in the asset management industry in 2017 if the sale does take place.

The largest was the £11bn merger of Standard Life and Aberdeen Asset Management, which completed last month.

Mr Buxton and Old Mutual both refused to comment.