Old Mutual (OML) has led the FTSE 100 higher after the financial services ground announced the long anticipated sale of part of its funds business for £600 million.
Shares in the group rose 3.1% to 219.6p, helping the UK blue-chip index rise 23 points, or 0.3%, to 7,560.
Old Mutual has sold its 'single strategy' funds business, which excludes its 'multi-asset' funds offering, to the division's management, including chief executive Richard Buxton (pictured), and private equity group TA Associates, a former backer of Jupiter Fund Management (JUP).
Buxton, manager of the Old Mutual UK Alpha fund, said: 'The management team is delighted to be partnering with TA Associates to buy the single strategy business. I believe this is a good outcome for our customers and staff.'
The single strategy funds business runs £25.7 billion in assets. Old Mutual Wealth, which incorporates the group's multi-asset funds, investment platform, financial advice and wealth management businesses, runs £106.6 billion in assets.
Old Mutual is planning an initial public offering of its wealth business next year.
Eamonn Flanagan, analyst at Shore Capital, retained his 'buy' recommendation on Old Mutual despite the £600 million price being lower than he anticipated.
'The price, at c.2.3% of funds under management, is less than we had anticipated (we were closer to £750 million and c3%), representing a great purchase for TA Associates and staff, in our view,' he said.
'The transaction vindicates our view that within Old Mutual Wealth there are some wonderful businesses, we just remain unconvinced that holding them all together in a single unit which is striving for "vertical integration" is the optimal strategy.
'We still believe there is an outside possibility that Old Mutual Wealth will not make it to the market, rather it will be acquired by an external party.'