A former investor in Gartmore, the asset manager, has been approached about backing a buyout of Old Mutual’s £25bn fund management arm.
Sky News has learnt that Hellman & Friedman, a US-based private equity firm, is among a number of parties being sounded out by Old Mutual as it tries to drum up a bumper auction of the business.
A potential deal would see Richard Buxton, the star fund manager who runs Old Mutual Global Investors (OMGI), leading a buyout of the division’s single-strategy operations.
Any such transaction could value the unit at somewhere in the region of £550m, bankers said on Monday.
If completed, it would rank among the most significant takeovers in the UK asset management industry, which is grappling with increasingly onerous regulation.
Sky News revealed earlier this month that Mr Buxton was talking to TA Associates, a former owner of the fund manager Jupiter, about a deal to buy out part of OMGI.
Old Mutual subsequently issued a statement confirming that it was “assessing, together with OMGI management, internal and external structures” for the third-party funds business run by Mr Buxton.
Sources said that Cinven and CVC Capital Partners were among the other buyout firms being approached by Goldman Sachs, Old Mutual’s advisors.
Affiliated Managers Group, a global asset management business, and Natixis, the French finance group, are also expected to be asked whether they have an appetite to back an OMGI buyout, the sources added.
The prospective sale of OMGI’s funds arm will not include the multi-asset unit which manages about £11bn for the FTSE-100 group, according to a source.
If a deal does take place, it would leave Mr Buxton in charge of one of the City’s most influential fund management businesses.
He joined OMGI in 2013 and then became chief executive of the division two years later.
Talks about a deal come as Old Mutual pursues a radical break-up.
The company is being split into four parts, comprising South African lender Nedbank; a US-based asset management business in which Old Mutual’s stake will be sold down to 6% later this year; Old Mutual Wealth, which is the unit in which OMGI sits; and Old Mutual Emerging Markets.
Bruce Hemphill, the group’s chief executive, is unusual among big company bosses in pursuing a strategy which will lead to him effectively losing his job once the break-up is complete.
He has enjoyed the support of investors for the move, however, as he seeks to unlock the valuation discount typically suffered by conglomerates.
Established in Cape Town in 1845, Old Mutual has endured speculation for years about its corporate structure.
H&F, Cinven and CVC all declined to comment.
Source: SKY News