BOSTON, July 25, 2002 (PRIMEZONE) -- The U.S. asset management group of Old Mutual plc (LSE:OML) today announced results for its affiliated asset management firms for the six months ended June 30, 2002. The group achieved strong relative performance overall, with assets under management declining 3.2% excluding divestitures, compared to a 6.9% decline for the Dow Jones Industrial Average, 13.2% decline for the S&P 500 Index, and 25.0% decline for the NASDAQ Composite Index. In addition, the firms in aggregate had net inflows of client assets of $1.5 billion, or 1.0% of 2001 yearend assets of $149.9 billion, and divestitures of nonstrategic firms and transfers within Old Mutual accounted for a reduction of $5.4 billion or 3.6% of assets. As of June 30, the group managed a total of $141.2 billion.
"The broad diversification of our firms' investment strategies was a key factor in our ability to outperform markets in the first half," said Scott Powers, chief executive of Old Mutual's U.S. asset management operations. "The environment continues to favor experienced managers with highly disciplined and focused investment approaches. This is clearly a strength of our affiliated firms. We also added two experienced leaders to our management team in Tom Turpin and Kevin Hunt, and established a distribution alliance with Nuveen Investments which opens potential areas of growth for many of our firms. As we work to expand cooperative distribution efforts, one of our most significant successes this year has been the growth of new PBHG Funds subadvised by our affiliates. Our firms continued to build on a successful 2001 in winning new client mandates."
Assets under management for the group on June 30 were divided as follows: $78.1 billion for the seven firms within Old Mutual Asset Managers (U.S.) ("OMAM(U.S.)"), $8.9 billion for Pilgrim Baxter & Associates (excluding assets in the PBHG Funds subadvised by other Old Mutual firms), and $54.2 billion for the 18 firms in the Old Mutual Affiliates group. Detailed information on the asset breakdown for each of the firms is available from the group's website at http://www.oldmutualus.com.
Joining the group's senior management team in April were Tom Turpin, formerly managing director and head of defined contribution plans at Putnam Investments, as executive vice president and chief operating officer, and Kevin Hunt, formerly director of Morgan Stanley's Managed Portfolio Group, as executive vice president and head of sales, marketing and product development.
In May, the group announced the formation of a strategic alliance with Nuveen Investments through which Nuveen will distribute investment capabilities of Old Mutual's affiliates on a subadvisory basis, and the sale to Nuveen of OMAM(U.S.) affiliate NWQ Investment Management. That transaction is expected to close in the coming weeks. As part of the group's efforts to develop distribution synergies among affiliates, five new funds subadvised by Old Mutual affiliates were introduced to Pilgrim Baxter's PBHG Funds in December and January. The subadvised funds attracted $1.3 billion in investor assets in the first half of 2002, led by PBHG IRA Capital Preservation subadvised by Dwight Asset Management and PBHG Clipper Focus subadvised by Pacific Financial Research, to bring total assets in the subadvised funds to $1.7 billion on June 30. More information on the investment strategies and performance of each of the funds is available at http://www.pbhgfunds.com.
Divestitures of two firms were completed in early 2002: New Yorkbased Suffolk Capital Management was acquired by Ohio National Financial Services of Cincinnati, and Pittsburghbased C.S. McKee & Company was acquired by the firm's management team. In total, 14 firms have been divested since Old Mutual's acquisition of United Asset Management Corp. in September 2000. Also in the first half of 2002, two affiliates, Amsterdambased Palladyne Asset Management and Parisbased Expertise Asset Management, were transferred out of the U.S. asset management group and are now reporting to Old Mutual Financial Services in London.
NOTES TO EDITORS
Old Mutual plc
Old Mutual plc is an international financial services company based in London, with operations in asset management, life assurance, banking and general insurance. The company is listed on the London, Stock Exchange with a market capitalization of approximately $4.8 billion as of July 24, 2002. It is also listed on the Johannesburg, Namibia, Malawi and Zimbabwe stock exchanges. More information on Old Mutual is available at www.oldmutual.com.
Fund inflows to OMAM (U.S.) from Old Mutual's U.S. Life operations for the six months to June 30 2002 amount to $1.3bn.
31 Dec Divested/ Net cash Market movement 30 June
2001 Transferred flows 2002
OMAM (US) 76.7 3.1 1.7 78.1
PBA 12.6 1.2 2.5 8.9
OMA Strat 37.5 0.1 0.9 0.1 36.6
Sub Total 126.8 0.1 1.0 4.1 123.6
OMA Fin 23.1 5.3 0.5 0.7 17.6
Grand Total 149.9 5.4 1.5 4.8 141.2