Australian firms Challenger and Macquarie have joined the race for Old Mutual's fund management arm

Alys Key
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The spun-out company would be a major independent fund manager (Source: Getty)

Two Australian banks have joined bidders lining up for Old Mutual's fund management business as the conglomerate executes its plan to break up into separate companies.

Macquarie and Challenger are among a small number of potential buyers for a £25bn division of Old Mutual Global Investors (OMGI), which is headed up by Richard Buxton, Sky News reported yesterday.

The £550m auction already includes buyout firm TA Associates. A decision is expected to be made before the end of the year.

The sale would leave Buxton in charge of an influential independent fund manager. However, the sale will not include the £11bn multi-asset unit.

OMGI's chief executive Richard Buxton previously managed the Schroders UK Alpha Plus Fund for over 10 years before joining Old Mutual in 2013 and being appointed CEO in 2015.

FTSE 100 conglomerate Old Mutual is dividing up its units, meaning Nedbank, Old Mutual Wealth, Old Mutual Emerging Markets will all operate independently while the OMGI unit will be sold off and a stake in a US asset management business will be sold down to six per cent.

Goldman Sachs is advising on the breakup.

Read more: Tight deadline set for bidders to submit offers for Old Mutual's funds arm

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