Quilter plans to undertake a strategic review over its stake in Old Mutual Wealth
Quilter, unbundled from Old Mutual last year in a managed separation, said yesterday that no decision had been taken by its board on any particular option yet, but the strategic decision included the possibility of disposing the heritage life insurance business.
“No decision has been taken by the board of Quilter on any particular option, including whether to effect a disposal of Old Mutual Wealth Life Assurance Limited. Accordingly, there can be no certainty that any transaction will be concluded, or if so, its timing or terms,” the group said.
The group added that a further announcement would be made if and when appropriate.
In the year to end December results, Quilter reported that Quilter Life Assurance had net outflows of £2.3 billion (R40.75bn), up from £1.6bn compared to 2017, principally due to the closure of the institutional life book of business announced in 2017.
The remainder of the Quilter Life Assurance book ran off at a rate of 14 percent, which is broadly in line with expectations.
Jordan Weir, a trader at Citadel, said the potential sale of the Old Mutual Wealth Life Assurance was not necessarily related to the net outflows witnessed in 2018, if connected at all.
“This decision rather forms part of the company's long-term strategy to strip non-core assets from out its business model, as Old Mutual Wealth Life Assurance has never been part of Quilter’s main strategic focus,” Weir said.
He added that should the sale occur, a special dividend could possibly be distributed to shareholders, while any remaining profits from the sale would be invested into bettering the company's vertical integration as a whole. “This would potentially mean a positive outcome for all parties,” he said.
Quilter plc, a leading wealth management business in the UK and internationally, oversees £114.9bn in investments as at March 31, 2019.
It has an adviser and customer offering spanning financial advice, investment platforms, multi-asset investment solutions and discretionary fund management.
The business is comprised of two segments: Advice and Wealth Management, and Wealth Platforms.
However, Quilter said its businesses were being rebranded to Quilter over a period of two years, with the multi-asset business now called Quilter Investors. Quilter is also rebranding its other seven businesses.
Quilter shares closed 1.37 percent higher at R25.90 on the JSE yesterday.