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Buxton effect powers 66% rise in inflows at OMGI

by Danielle Levy on May 15, 2014 at 07:49

Buxton effect powers 66% rise in inflows at OMGI

Old Mutual Global Investors (OMGI) felt the 'Buxton effect' over the first quarter with a 66% rise in inflows year-on-year.

The fund management arm of the Old Mutual group reported gross sales of £2.5 billion over the three months to the end of March, up 66% on last year. The group noted that equities had performed particularly well, no doubt helped by the hire of star manager Richard Buxton from Schroders last year and the new money he has brought in. This helped the business to be voted number one fund manager by net retail sales in the quarterly Pridham Report. Old Mutual also highlighted strength in its alternatives proposition.

Over the quarter the fund management business attracted £1.1 billion in net inflows, bringing total assets up to £17.4 billion.

Old Mutual Wealth also saw £1.1 billion of net new money over the quarter, up from £0.4 billion the previous year. This brought total assets up to £80.2 billion.

In the UK, Old Mutual's platform business reported gross sales of £1.3 billion, with 28% of new business sales going to OMGI - double last year's figure. Assets under administration stood at £28.1 billion, up 2% over the quarter.

In Old Mutual Wealth's international arm, gross sales of £427 million were down 5%, due to slower sales in Hong Kong, Singapore and Latin America, although European, South African and UK sales performed well. The group was also hit by £19 million of Nordic outflows in the quarter and expects a further £180 million of these before year-end.

The group said it was particularly excited about changes announced in the 2014 Budget statement, signalling radical changes to the UK pension system, particularly as Old Mutual Wealth does not write annuities but is a large provider of pension income drawdown products in the UK. 

Commenting on its recent decision to buy adviser network Intrinsic and a stake in Intrinsic Cirilium, which offers risk-rated multi-manager portfolios, Old Mutual said it viewed the provision of financial advice as fundamental.

'Should the UK Government's proposal for Defined Contribution pension schemes to provide impartial advice to members approaching retirement be adopted, this could lead to significant opportunities for Intrinsic,' the group said.

Julian Roberts, group chief executive, commented: 'Old Mutual Wealth and Emerging Markets both produced very strong sales in the quarter. We are very excited about the opportunities for Old Mutual Wealth following the announced changes to the annuitisation rules and we are well positioned to help customers in the UK meet their retirement needs.'

At a group level Old Mutual saw funds under management rise by 2% to £297.1 billion.

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