It aims to broaden USAM’s access to capital and increase operating flexibility to grow the business.
Acquired by Old Mutual for $2.2bn in 2000, USAM is now a solidly profitable, slimmed-down business.
In results released yesterday group CE Julian Roberts noted that the US business had continued its good first half performance into the second half of the year to December translating into profit, margin growth and sustained positive net cumulative cash flow (NCCF).
USAM earned profits of $174m (GBP104m), up by 21% on the previous year. NCCF at $16.3bn, represented 7.8% of the opening funds under management (FUM).
FUM stands at $257.4bn, 23% higher than the prior year due strong net flows and positive market movements.
The business accounts for about 6.5% of Old Mutual’s GBP 1.6bn adjusted operating profit for the year.
The beauty of asset management companies is that while they are not capital hungry, they can be very cash generative, says Reuben Beelders, Gryphon Asset Management portfolio manager. A listing can unlock value because it increases visibility in the business and allows the market to place a fairer value on it.
Old Mutual may later decide to exit its entire investment in USAM.