Fund manager Richard Buxton and private equity group TA Associates are close to agreeing a deal to buy a large part of Old Mutual Global Investors for about £600m, according to a person close to the situation.
Mr Buxton, chief executive of OMGI, plans to buy the asset manager’s £25.7bn single strategy business and create a newly independent investment boutique with the support of TA, which previously backed a management buyout of Jupiter Asset Management.
The planned deal, which was first reported by Sky News, is expected to be announced within days. It was triggered by the wider break up of the £9bn Old Mutual financial services group, announced last year by group chief executive Bruce Hemphill in a bid to boost investor interest.
His plan will see the 172-year-old Anglo-South African business split into four parts: a US asset manager, a UK-based wealth manager, a South African bank and an African insurer.
Old Mutual Wealth, the UK wealth manager, is due to be floated next year. But there has been uncertainty over the future of OMGI, its high-profile asset management unit, after it emerged three months ago that Mr Buxton had embarked on talks with private equity backers.
Mr Buxton, who joined OMGI in 2013 and been appointed chief executive two years later, is considered a star. OMGI, which oversees close to £40bn in assets, has more than doubled in size under his leadership and has a growing share of international investors. He previously spent a decade at Schroders, the UK fund house.
The deal by Mr Buxton and TA does not include OMGI’s multi-asset unit that manages £15.1bn.
Also in the frame for OMGI were US private equity group Carlyle and Challenger and Macquarie Investment Management, two Australian financial services groups.
Old Mutual, TA and Carlyle declined to comment. Macquarie did not immediately respond to a request for comment. Challenger could not be reached for comment.
The creation of a standalone boutique would stand out in the UK asset management landscape that has been dominated by two large mergers in the past year.
Standard Life Aberdeen was created through an £11bn all-share merger of insurer Standard Life and Aberdeen Asset Management in August as part of an effort to cut costs drastically and gain scale. Meanwhile Anglo-Australian investment company Henderson agreed to buy US rival Janus Capital last October to create Janus Henderson.
Additional reporting by Javier Espinoza
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