Old Mutual Wealth spent at least £9 million for the Caerus network as part of a spate of acquisitions of UK businesses in the last year.
New Model Adviser® revealed Caerus and Old Mutual Wealth were in talks about a deal in December 2016. An agreement was eventually reached in February, when the Caerus board recommended other shareholders in the network, including advisers, accepted the takeover offer.
In its financial statements for the six months to 30 June 2017, Old Mutual Wealth describes the network as ‘a UK based adviser network that operates in a similar manner to Intrinsic and which has… 289 advisers, including 130 restricted financial planners and more than £4 billion of assets under advice.’
A breakdown of the costs of the acquisition state Old Mutual Wealth bought 100% of the share capital of Caerus for a two-year deferred payment of £3 million and another three-year deferred payment of £6 million.
The results also show Old Mutual Wealth also recognised good will of £11 million on the acquisition and other intangible assets of £10 million were recognised.
The firm did not comment when asked about the cost of acquisitions, but the results show the deal was worth at least £9 million.
Elsewhere the financial statement said it completed the acquisition of five adviser businesses as part of the expansion of its Old Mutual Wealth Private Client Advisers (OMWPCA), a business launched in October 2016.
Old Mutual Wealth said it acquired the five businesses for at least £11 million, £6 million of which was dependent on performance targets.
Old Mutual Wealth completed the acquisition of Investment Management via its discretionary fund manager Quilter Cheviot in March this year and said it valued the assets in the acquired business at less than £1 million and the intangible assets at £9 million.
The company said the Caerus acquisition helped boost its number of restricted financial planners by 11% to 1,582 over the last six months.
After its five recent acquisitions, OMWPCA now has £1.7 billion in assets under advice including £100 million of assets under management to Quilter Cheviot.
Profits up as split looms
For the six months ending 30 June 2017, overall Old Mutual Wealth’s adjusted operating profit overall was at £134 million, up 29% from the first half of 2016.
This was boosted by ‘performance fees’ of £17 million from strong investment performance, the results said.
Total funds under management for Old Mutual Wealth were at £127.3 billion, a 10% rise from the end of 2016.
As part of its plans to spin out Old Mutual Wealth as a separate business, which it expects to complete ‘at the earliest opportunity’ in 2018, the group announced it was pumping £200 million of capital into the wealth arm.
The separation also involves the closure of the firm’s London office which it expects to be completed next year and bring with it an annual £10 million of cost savings. Old Mutual said it has already cut the head count of this office by 50%.
Paul Feeney, Old Mutual Wealth chief executive, said: ‘2017 continues to be a year of transition for Old Mutual Wealth as we move towards our separation from Old Mutual plc, and we are excited about the opportunities ahead.’