Old Mutual sells stake in Indian venture, sees record quarter for Wealth

The FTSE 100 company said the gross cash consideration for the transaction, before tax, was INR 12.93bn, or £156m, with the net consideration expected to be around INR 11.7bn, or £141m.

It said the transaction remained subject to Indian regulatory approvals, and was expected to complete in the second half of 2017.

As at 31 December 2016, the carrying value in Old Mutual’s consolidated financial statements of its stake in the venture was £45m.

“The conclusion of the transaction will also terminate the joint venture arrangement, including the respective put and call option arrangements between the parties relating to a 23% stake in the joint venture,” Old Mutual’s board said in a statement.

“Old Mutual will use the proceeds from the transaction for general corporate purposes.”

At the same time, the board of Old Mutual Wealth announced the appointment of Tim Tookey as chief financial officer, reporting to chief executive Paul Feeney, subject to regulatory approval.

Tookey was currently a non-executive director of Old Mutual Wealth and chairman of its audit committee.

The board said Mark Satchel would become corporate finance director and act as a deputy to Tookey, whilst remaining a member of the Old Mutual Wealth executive committee and a director on the board.

George Reid would take over from Tookey as interim chair of the board’s audit committee, and the board said it would begin a search for an independent non-executive director to replace Tookey in the permanent position.

“I am delighted that Tim has agreed to join the executive team,” said Paul Feeney.

“He brings a wealth of capital markets, regulatory and operating experience with large publicly listed financial services companies.”

Feeney said he believed that, working together, Tookey and Satchel would support the business through the next phase of its “corporate journey” as well as building on the positive momentum the board had achieved.

“We will be seeking to appoint a further non-executive director in due course, given Tim's executive appointment.”

Finally, Old Mutual Wealth published a financial update for its first quarter, with net client cash flow rising 59% year-on-year to £2.7bn during the period.

Gross sales were up 44% at £7.2bn, and funds under management were 6% higher than the first quarter of 2016 at £122.3bn.

“We have started the year very strongly with our highest ever quarter for net client cash flow and funds under management,” Feeney commented.

“Integrated flows from Intrinsic increased 60% to £0.8bn.

“Our Q1 2017 net flows, particularly onto the Platform and into OMGI, demonstrates that advisers and customers are increasingly recognising the strength of our model and that we are offering investment solutions that meet their needs.”

Feeney said Old Mutual Wealth had the “right solutions for these uncertain times”, particularly its multi-asset, absolute return and high alpha product ranges.

“While we are hopeful that this momentum will continue throughout 2017, we expect that markets will remain volatile and challenging in the medium-term, particularly until both the outcome of the upcoming general election and greater details on the terms of the UK's exit from the EU are known.”