Old Mutual Asset Management — a well-heeled, multi-boutique asset manager with $203.1 billion in AUM, has filed for an IPO. The firm is a division of Old Mutual, which is a London-based insurer established in 1845.
Old Mutual Asset Management’s roots go back to 1980, which certainly was an ideal time to start an asset management firm given that was the start of America’s massive bull market. To build scale, the firm pulled off a variety of acquisitions of boutique operators. Yet Old Mutual allowed them to remain fairly independent, which has helped to allow for better investment returns as well as continuity. (Average tenure for a manager is roughly 20 years.)
Old Mutual currently has seven boutiques, and each has access to the parent company’s core infrastructure, such as compliance, distribution channels, talent management and risk management.
The boutiques include:
- Acadian Asset Management ($65.9 billion): This takes a quant approach to active global equity, fixed income and income strategies. The flagship fund, Emerging Markets Equity (AEMGX), has outperformed its benchmark by 3% on an annualized basis from 1994 to 2014.
- Barrow, Hanley, Mewhinney & Strauss ($93.5 billion): This is a value manager and is an adviser to a variety of mutual funds, including the Vanguard Windsor II (VWNFX) fund.
- Campbell Global ($6.7 billion): This is a manager that focuses on alternative investments, such as timberland.
- Copper Rock Capital Partners ($2.8 billion): This manager specializes in growth equity investments.
- Heitman ($24 billion): The manager has been around since 1966, with a focus on real estate. The investments include private and public securities as well as debt.
- Investment Counselors of Maryland ($2.4 billion): This is another value-driven shop. It invests in companies that span small to mega caps.
- Thompson, Siegel & Walmsley ($7.8bn billion): This is a value manager that has a broad mandate, investing in global equities, fixed income and alternatives.
All in all, Old Mutual funds have chalked up competitive returns. By the end of Q1, Old Mutual claims that “the percentage of our revenue represented by assets under management outperforming their investment benchmarks on a one-, three- and five-year basis was 77%, 93% and 68%, respectively.”
Financials have been solid, with revenues climbing from $435.7 million in 2011 to $528 million last year, while pre-tax income went from $124.3 million to $153 million.
As for the prospects for the Old Mutual IPO, it’s still tough to tell, as few asset managers have gone public recently, and the latest one — Ares Management (ARES) — was a disappointing deal. It was priced at $19, which was below the range of $21 to $23, and the stock hasn’t moved much from there.
Still, it might be hasty to think the Old Mutual IPO will fare just as poorly. After all, the firm has a strong brand and an enviable long-term track record, not to mention a broad platform of investments.
Old Mutual IPO Notes
- Expected Listing: New York Stock Exchange, ticker OMAM
- Lead Underwriters: BofA Merrill Lynch (BAC), Morgan Stanley (MS), Citi (C) and Credit Suisse (CS).
- So far, there are no pricing terms on the Old Mutual IPO.
- The offering will likely hit the markets some time during the fall.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.