Emerging markets shone in the third quarter at finance house Old Mutual as the group continued its transition away from selling traditional life assurance products to unit trusts.
Funds under management (FUM) at the end of September stood at £263.3bn versus £254.3bn at the end of June. Net client cash flow was negative during the quarter, easing by £0.5bn, but a massive improvement on the £5.4bn yanked from Old Mutual's core operations in the third quarter of 2011.
Long-term savings FUM under management rose 3% on a constant currency basis over the quarter to £118.2bn from £115.1m. On the US asset management side, FUM from continuing operations rose 4% on a constant currency basis to £126.7bn from £122.0bn.
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Emerging Markets FUM increased by 3%, on a constant currency basis, to £50.9bn, due to positive market movements. Old Mutual Wealth FUM increased by 3% to £67.3bn, driven by net client cash inflows and improved markets. UK FUM increased 5% over the three months to £35.8bn, with UK Platform FUM of £21.7bn up 6% from June 30th. Old Mutual Global Investors (OMGI) managed £13.2bn of FUM.
Total covered sales on an annualised premium equivalent (APE) basis fell by a tenth in the third quarter to £278m from £308m in the corresponding period of 2011.
Covered sales in Emerging Markets rose 12% on a constant currency basis to £140m but this was more than offset by a 17% foreign exchange (FX) adjusted decline in covered sales at Old Mutual Wealth.
Non-covered sales - unit trusts, mutual funds and similar products - on an APE basis rose 4% to £3,765m from £3,629m in the same quarter of 2011.
"Our sales during the period highlight the growing shift from traditional life products to modern investment products, including unit trusts and mutual funds, with these sales up 19% in Emerging Markets and 7%, on a comparable basis, in Wealth," said Julian Roberts, Old Mutual's Group Chief Executive.
"In South Africa our mass foundation business continued to grow and APE sales across Emerging Markets saw a double-digit increase.
"Although UK savings trends remain depressed by low consumer confidence and pressure on household finances, our performance in the UK and International was encouraging, with gross sales of £2.8bn in the quarter. We are progressing well with our plans to build Old Mutual Wealth into a leading wealth manager and are taking further steps to address its cost base," Roberts added.
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