Old Mutual’s (LON:OML) wealth unit could end up as a FTSE 100 company, The Telegraph has reported, quoting the division’s chief executive. The comments come after news emerged over the weekend that the unit had attracted interest from some of America’s biggest buyout funds, including Advent International and Bain Capital, the firms behind the recent float of Worldpay (LON:WPG).
Old Mutual’s share price has inched higher this morning, having added 0.31 percent to 192.50p as of 10:28 BST. The shares are slightly outperforming the FTSE 100 which currently stands 0.07 percent higher at 6,110.50 points. In the year-to-date, the shares have gained about eight percent, as compared with about a two-percent fall in the blue-chip index.
Paul Feeney, who has led Old Mutual Wealth since 2012, told The Telegraph yesterday that the division could end up as a FTSE 100 company in its own right once it is carved out of Old Mutual. With the blue-chip financial services group having unveiled plans to split into four separate companies, the wealth arm expects a multi-billion-pound valuation.
Old Mutual’s wealth business includes Quilter Cheviot, an investment manager, and Intrinsic, a network of advisers. It also includes Old Mutual Global Investors, one of the best-known City asset managers.
“We’ve built a business here and now that’s probably a FTSE 100 company in its own right, if it went down that route,” Feeney pointed out. “I’m not saying it will go down that route, I’m just saying if it were.”
While floating the business is an option, Old Mutual will reportedly consider bids for the unit before 2018 should a “knockout offer” come along. Bain and Advent meanwhile are said to be considering joining forces to make a move on Old Mutual Wealth, while Cinven and Warburg Pincus have reportedly made a joint pre-emptive offer for the wealth division.