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Quilter jumps on debut after being spun out of Old Mutual

The initial public offering of Quilter on Monday will be followed on Tuesday by the listing of Old Mutual.
Quilter's stocks advance on the day it lists on the JSE. Picture: Supplied

Quilter Plc’s rallied in its first day of trading in London and Johannesburg as the UK wealth manager set its own path after being spun out of Old Mutual.

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, which will house the company’s African insurance and asset-management units, and culminate with the unbundling of Nedbank 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 UK market is a growing market.”

With 112 billion pounds ($148 billion) in assets under management and a 3 billion-pound market capitalisation, Quilter’s debut puts it shoulder to shoulder with Man Group Plc, the alternative investor that’s become a household name in the UK through its sponsorship of the Booker Prize for literature. Standard Life Aberdeen Plc, the Scottish investment firm with 576 billion pounds in assets and a market value of 10.2 billion pounds, still rules the ranks of listed wealth managers in Britain.

Listen: Quilter lists on the JSE, LSE 

Small acquisitions

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

After having built scale through acquisitions, including the expansion of its distribution footprint in the UK 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 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.”

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