Old Mutual Wealth agreed to sell part of its money management business, known as Single Strategy, to private equity firm TA Associates.
Single Strategy and Old Mutual Wealth's multiasset strategy business make up Old Mutual Global Investors, a spokeswoman confirmed. The multiasset part will remain with Old Mutual Wealth and will rebrand as Quilter Investors next year. "Led by Paul Simpson, CEO, this business is a core part of the Old Mutual Wealth strategy, delivering leading investment solutions to a wide number of U.K. and international retail clients," a news release said.
The £600 million ($803 million) deal is made up of £570 million in cash payable on or before completion of the deal and about £30 million to be paid primarily from 2019 to 2021 as surplus capital associated with the separation from Old Mutual Wealth, the news release said.
TA Associates will take economic ownership of Single Strategy on Jan. 1. The deal is subject to regulatory approvals and conditions.
The Single Strategy business has £25.7 billion in assets under management. CEO Richard Buxton and the majority of the Single Strategy management team will remain with the business when it moves to TA Associates.
Old Mutual Wealth announced the creation of the multiasset business in September. The spokeswoman said this part of the firm had £15.1 billion in assets under management as of Sept. 30.
The firm also considered internal and external structures for the Single Strategy business to continue its development. "The announcement of this transaction follows a rigorous review process, which included interest from a number of market participants," the news release said.
"Ahead of our managed separation and proposed listing in 2018, we are pleased that we have completed the strategic review of the Single Strategy business and agreed terms for a transaction with TA Associates," said Paul Feeney, CEO of Old Mutual Wealth, in the release. He added that the Single Strategy business "is less closely aligned to our goal of becoming the U.K.'s leading wealth manager. I believe this development is a good outcome for our shareholders and provides the Single Strategy team with a great opportunity to build on the success they have achieved since 2012."