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Buxton powers 90% rise in UK equity flows at Old Mutual

Buxton powers 90% rise in UK equity flows at Old Mutual

Old Mutual Global Investors (OMGI) doubled adjusted operating profit to £16 million over the year to the end of June, driven by strong asset growth.

Substantial sums of money followed star manager Richard Buxton over to OMGI, contributing to a 6% rise in assets under management to £17 billion over the first half of the year. This represented a 15% rise on the year. Sales in OMGI's UK Equity range were 90% higher than 2013, driven by strong flows into Buxton's Old Mutual UK Alpha fund, which now stands at £1.5 billion.

Within Old Mutual Wealth the Skandia platform increased its profits by 400% to £10 million in the first half of 2014, thanks to strong flows into its flagship investment range WealthSelect.

The WealthSelect proposition has attracted £225 million in inflows since its launch in February, adding to the £1 billion in assets that were invested on launch. This means assets currently stand at around £1.3 billion.

The platform’s assets under administration stood at £29 billion, a 5% increase since December 2013 when it had £27 billion in assets.

Old Mutual Wealth’s adjusted operating profit was £120 million for the first six months of the year, up 11% from the £108 million in 2013, due in part to OMGI’s strong performance.

Meanwhile, at OMGI net client cash flow at OMGI increased significantly over the past year from £0.2 billion to £1.1 billion at the end of June.  

OMGI said gross sales of £4.5 billion were 29% higher than the previous year due to strong sales through UK third parties and improving sales penetration through Old Mutual Wealth.

The company saw strong flows into alternatives, multi-asset, alongside WealthSelect.  

OMGI noted the loss of a £248 million segregated mandate and a further £153 million outflow from its divested Nordic business. It said outflows were largely from low margin mandates via third party institutional channels.

Warren Tonkinson, head of global distribution at Old Mutual Global Investors said changes implemented at a group level had played a pivotal role in growth.

'We are now well placed for future expansion. We will continue to build on our successful UK experience and have firm plans to continue to expand into other international markets and invest in additional investment capabilities.'

In Old Mutual Wealth’s financial statement for the first six months of the year, the Skandia platform increased its adjusted operating profits to £10 million from the £2 million it made during the same period in 2013.

The platform was boosted by gross sales of £2.5 billion, up 11% on the £2.3 billion for 2013 which it said was a result of the high demand for its proposition.

At 8:59 shares were down 2.3%, trading at 190 pence.

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