The market showed less enthusiasm for Old Mutual’s half year figures than peers Standard Life and Prudential, despite outflows from their fund businesses.
Adjusted operating profit at OMW fell to £104m compared with the previous year’s £151m as a result of “operational challenges” and “tough markets,” the firm said.
Old Mutual Wealth reported a £3.2bn net inflow over the period, up 39%. Overall assets grew 7% to £111.2bn. This was in large part down to the contributions of its investment management arm, Old Mutual Global Investors, which brought in £1.6bn in net inflows.
Together with OMW’s Quilter Cheviot business, the two divisions account for 40% of the group’s total funds under management.
OMGI’s Global Equity Absolute Return Fund was singled out as one of the primary drivers of the business’ healthy stream of net client cash flow as it continues to experience strong investor demand in the current low interest rate environment.
OMW chief executive, Paul Feeney, remarked that while the firm’s bottom line was negatively impacted, the growth achieved by the asset management business was a positive takeaway.
“This has been a challenging six months for Old Mutual Wealth, and the whole industry, with volatile markets dominating the first half of this year, indeed it was the worst period for net retail flows for the industry in 20 years. Against this backdrop, I am pleased with the resilient net client cash flow that the business delivered of £3.2 billion, up 39% on that of the prior year.”
“Our advice-led, vertically integrated strategy is delivering year on year growth in net flows, increasing our funds under management despite weaker markets. We are in a great position to build competitive advantage and deliver sustainable long-term growth in profits, cash generation and value,” he said.
