Quilter Gains on Debut After Being Spun Out of Old Mutual

(Bloomberg) -- Quilter Plc’s rose in its first day of trading in London and Johannesburg as the U.K. wealth manager set its own path after being spun out of Old Mutual Plc.

The breakup of 173-year-old Old Mutual will be largely complete this week as the London-based insurer hives off its businesses after determining that they would be worth more on their own. The initial public offering of Quilter on Monday will be followed on Tuesday by the listing of Old Mutual Ltd., which will house the company’s African insurance and asset-management units, and culminate with the unbundling of Nedbank Group Ltd. in about six months.

"We’re very excited about what we can achieve as an independently listed business," Finance Director Mark Satchel said in Johannesburg on Monday. "The U.K. market is a growing market.”

With 112 billion pounds ($148 billion) in assets under management and a 3 billion-pound market capitalization, Quilter’s debut vaults it past Rathbone Brothers Plc. The London-based company is worth 1.4 billion pounds and has about 38 billion pounds under management.

Small Acquisitions

Quilter’s stock advanced as much as 10 percent before paring gains to trade 1.4 percent up at 147 pence as of 3:23 p.m. in London. The secondary shares listed in Johannesburg were trading 2.5 percent higher.

After having built scale through acquisitions, including the expansion of its distribution footprint in the U.K. when it bought Intrinsic in 2014, Quilter will now focus more on organic growth, Satchel said in an interview.

"We pointed towards making some acquisitions in the business space at a much smaller scale than what we had over the last while," he said. "We’ve set aside about 20 million pounds per year to continue to make small acquisitions, particularly as we grow out our client advisory side."

Quilter also has a technology program underway which, together with the outsourcing of some of its activities, will see the company’s headcount reduced, Satchel said. Staff members have been notified of the potential impact of the program on jobs, he said, without being more specific.

“Quilter is now a completely different business to any of the remaining parts,” said Brad Preston, chief investment officer at Mergence Investment Managers Ltd. in Cape Town. “Quite a nice performance so far on the listing, it looked like it was priced well and there was quite a lot of demand.”

--With assistance from Thembisile Dzonzi.

To contact the reporters on this story: Roxanne Henderson in Johannesburg at rhenderson56@bloomberg.net;Edward Robinson in London at edrobinson@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Vernon Wessels, Jon Menon

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