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Record cash flows for Old Mutual's US arm |
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Record cash flows for Old Mutual's US arm
October 26, 2005
By Sherilee Bridge
Johannesburg - Old Mutual, the London and Johannesburg-listed insurance
giant that has made a R38 billion play for Swedish insurance group
Skandia, said yesterday that its US asset management business had
achieved record cash flows this year.
"Net inflows of client assets in the quarter totalled $6.6 billion [R44
billion], including $952 million in cash collateral assets, while
investment performance in the funds under management at member firms
was responsible for $8.2 billion, or 3.9 percent, of the total
increase," the group's US asset management arm, Old Mutual Asset
Management (Omam), said in a statement.
Assets managed by the group's member firms increased 7 percent in the
quarter, from $209 billion at the end of June to $223.7 billion at the
end of September.
"Overall for the year to date, assets managed by the group's member
firms have increased 21.2 percent, from $184.6 billion at year-end
2004, driven by net inflows of client assets totalling $26.7 billion,"
the company said.
Omam's US operations are comprised of 21 member firms, each wholly
owned by the group, but each has retained its individual management and
investment style.
Old Mutual said in its 2004 annual report that almost two-thirds of all
its assets under management are for the account of US clients.
The US asset management business and US life insurance business, which
accounts for roughly half of its new life business, grew their combined
operating profit by 25 percent to $337 million in last year.
While 75 percent of its profit is still made in South Africa, 50
percent of Old Mutual's new life business and 75 percent of its assets
under management emanate from the US and the UK. Old Mutual is hoping
through its takeover of Skandia to achieve similar earnings in each of
the three geometries.
The group's kronor 43.50 (R36.38) a share offer for Skandia opened on
October 17 and closes on November 21, and while there is still
uncertainty surrounding the likelihood of Old Mutual securing the 90
percent acceptance level it wants, the transaction is expected to be
completed early next year.
Shares in Old Mutual closed 1.11 percent, or 17c, firmer at R15.48 in
Johannesburg yesterday. This means a market capitalisation of R63.3
billion. The life assurance sector closed 1.47 percent firmer.
Old Mutual shares have added 8.25 percent this year and added 24.63 percent last year.
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