Carolyn Cohn London
SALES at Anglo-South African financial services group Old Mutual fell in the third quarter due to weakness in the rand and outflows from institutional investors, though funds under management rose on the year, the London-listed firm said in a trading statement yesterday.
Old Mutual has been restructuring its business, selling off some European assets and listing its US asset management arm. It is looking to expand in sub-Saharan Africa and has increased its focus on wealthy British private investors, seen as a growing and profitable market.
Last month, Old Mutual announced its wealth management arm is to buy Quilter Cheviot from European private equity house Bridgepoint, which will add about £15 billion (R265bn) to the Old Mutual Wealth unit’s assets under management.
“We are very pleased with the resilient performance in challenging markets,” finance director Ingrid Johnson said.
“Gross sales were influenced by translation effects with the weaker rand, and by volatility on the institutional side.”
Gross sales totalled £6.2bn (in) the quarter, down from £6.5bn in the same period last year, the firm said.
Funds under management were up 5 percent at £308bn at the end of September, compared with a year earlier.
But net client cash flows dropped to £0.6bn in the quarter, from £2.6bn a year ago, due to outflows from the firm’s institutional business.
The gross sales and funds under management numbers were in line with the consensus forecast of 11 analysts provided by the company, but cash flows were lower.
“We continue to see sense in restructuring of the group over the medium term… and nearer term we see possible capital return and dividend catalysts, which may materialise over the next one to two years,” said analysts at Bank of America-Merrill Lynch, which recommended buying the stock.
Old Mutual’s shares closed 0.65 percent up at R34.32 on the JSE yesterday. – Reuters