Two Australian financial services giants are engaged in a £550m takeover battle for the fund management business headed by Richard Buxton, one of the City’s best-known investors.
Sky News has learnt that Challenger and Macquarie Investment Management are among a “small handful” of bidders for a £25bn division of Old Mutual Global Investors (OMGI).
The bidding war, which has intensified in recent weeks, has pitted the Australian groups against TA Associates, a buyout firm which counts Jupiter Asset Management among its former investments.
Old Mutual, the FTSE-100 Anglo-South African financial services group, is expected to agree a sale of the unit headed by Mr Buxton, who runs OMGI, before the end of the year.
It is unclear whether Mr Buxton is keen on a sale to another trade player such as Challenger or Macquarie.
Confirming a report by Sky News last month, the company said it was “assessing, together with OMGI management, internal and external structures” for the single-strategy business led by the star stock-picker.
Goldman Sachs is advising Old Mutual on the auction of the OMGI unit as well as on the broader four-way break-up of the financial services group.
The prospective sale of OMGI’s funds arm will not include the multi-asset unit which manages about £11bn.
If a private equity deal does take place, it would leave Mr Buxton in charge of one of the City’s most influential independent fund management businesses.
He joined OMGI in 2013 and then became chief executive of the division two years later.
Old Mutual is now being split into four parts by chief executive Bruce Hemphill.
They are: South African lender Nedbank; a US-based asset management business in which Old Mutual’s stake will be sold down to 6% later this year; Old Mutual Wealth, which is the unit in which OMGI sits; and Old Mutual Emerging Markets.
Mr Hemphill, the group’s chief executive, is a rarity among big company bosses in pursuing a strategy which will lead to him effectively losing his job once the break-up is complete.
He has enjoyed the support of investors for the move, however, as he seeks to unlock the valuation discount typically suffered by conglomerates.
“I don’t think it was particularly badly managed or poorly put together, there was just no sense in the structure,” Mr Hemphill told The Times recently.
Established in Cape Town in 1845, Old Mutual has endured speculation for years about its corporate structure.
Mr Buxton’s move to lead a buyout of OMGI’s third-party business has attracted attention given his prominence in the City.
He is one of a small band of star managers whose influence grants him rarefied access to company boardrooms.
It is unclear what the business he will lead will be called, since Old Mutual’s name will only remain attached to its South African operations.
If the sale does take place, it will be the latest in a string of significant deals in the asset management industry this year.
The biggest was the £11bn merger of Aberdeen Asset Management and Standard Life to form Standard Life Aberdeen, which completed during the summer.