OMGI's Buxton Set To Announce £550m Buyout With Backing From TA Associates

According to Sky News, Buxton is on the brink of a deal to buy out the £25bn single-strategy business, which includes the £2.3bn UK Alpha fund he runs, as the parent firm continues its 'managed separation'.

It was previously reported two Australian financial giants Challenger and Macquarie Investment Management were in a bidding war for the business but Sky sources have now said private equity firm TA Associates, which supported Jupiter's management buyout from Commerzbank in 2007, will be named backer. The announcement is likely to be made in the coming days.

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The sale of OMGI is part of a managed separation of the Old Mutual business into four separate entities, but will not include the £16bn multi-asset part of the fund management arm, which was split out from OMGI last month.

The four parts of Old Mutual to be spun out as separate entities are South African lender Nedbank; a US-based fund management business, in which Old Mutual's stake will be reduced to 6% later this year; Old Mutual Wealth, of which OMGI is part; and Old Mutual Emerging Markets.

In September, it was revealed Buxton was trying to assemble a buyout of its single-strategy operations, which prompted  confirmation from Old Mutual that it was "assessing, together with OMGI management, internal and external structures" for the business.

Paul Feeney, chief executive of Old Mutual Wealth, said he was planning to carve out the £16bn multi-asset business from its fund management operations, while the single-strategy range was "less aligned with the Old Mutual Wealth model".

"While assets under management and profits are growing strongly, it is reliant on the wholesale and institutional market," he said.

"Only 20% of its assets under management come from the relationship with Old Mutual Wealth, which is why we will position it as a single and distinct part of the business."

Old Mutual Wealth announced last month it will operate using the Quilter brand following the separation from its parent company next year, with the business to be re-segmented into two divisions: ‘Advice and Wealth Management' and ‘Wealth Platforms'. The group said it remains on track to list as early as possible in 2018, subject to regulatory and other approvals.

Buxton joined OMGI as head of UK equities in June 2013, and was appointed as chief executive in August 2015. He was previously at Schroders, where he managed the UK Alpha Plus fund for over ten years. Prior to Schroders he spent more than a decade at Baring Asset Management, having started his investment career in 1985 at Brown Shipley Asset Management.