Old Mutual Investment Group (South Africa) Holdings PTY Ltd (OMIGSA Holdings) and Sanlam Investment Holdings Ltd (SIH) have signed a definitive agreement to acquire JPMorgan Administration Services (Pty) Ltd (JPMAS) from J.P. Morgan.
JPMAS administers assets on behalf of third-party clients, the largest of which are OMIGSA and Sanlam Investment Management (SIM).
Says Mr Robert Roux, Chief Operating Officer, Sanlam Investment Management: “After J.P. Morgan completed a strategic review of JPMAS, SIM and OMIGSA initiated a rigorous process to acquire the business and we are satisfied that we have reached a solution that adequately meets the needs of all parties involved. We are confident of a smooth transition over the coming months, with minimal changes expected. It will be business as usual.”
The service provided by JPMAS is core to the businesses of OMIGSA and SIM and is a full-service operating model, which incorporates standard administration services plus tax, accounting, unitisation, net asset value (NAV) pricing and reporting services. The transaction ensures that OMIGSA and SIM, as well as third-party asset managers, will continue to pass on to their clients the benefits of world-class fund administration services in a cost-efficient and sustainable manner.
It is important for both OMIGSA and SIM that they maintain high standards of integrity in their client data. Both OMIGSA and SIM have managed in-house administration services in the past and thus have a strong understanding of the operational requirements that will enable them to successfully drive the business forward. As the business will remain a separate independent servicing entity and the existing service level agreements will remain in place, the operating costs of OMIGSA and SIM will be largely unaffected. The service will also continue to be offered to third party asset managers.
OMIGSA CEO, Diane Radley, confirms the business imperative of the transaction, “While investment administration services are critical to an asset manager, as a business operation, it is not a competitive advantage but rather an essential service which should benefit the client by providing reliable and accurate service at the lowest possible cost. As the two key clients of JPMAS, clearly it is in the best interest of OMIGSA and SIM to ensure continuity and quality of service to its clients through this transaction. We intend to manage the business as a sustainable and profitable enterprise.”
“This is a positive move for our clients, our employees and our strategy in South Africa and the Sub-Saharan region,” said John Coulter, Regional Senior Country Officer, Sub-Saharan Africa, for J.P. Morgan.
“Following our strategic review of this business, we concluded that its long-term success required a model that creates value for customers and employees and, ultimately shareholders of J.P. Morgan. This agreement achieves those goals and enables us to focus on and continue our significant investment in our core investment services business, which operates successfully in our chosen markets around the world,” said his colleague, Francis Jackson, head of J.P. Morgan Worldwide Securities Services in Europe, Middle East and Africa.
The transfer of business, subject to regulatory approval, including applicable competition laws, is planned to take effect on 1 September 2012. Until then, the business will continue to be run by current JPMAS management to transition the business into a stand-alone operation.
Once the deal is in effect, OMIGSA and SIM intend that the business of JPMAS continues to operate as a going concern, from its present location, and as an independent third-party administrator for the SA asset management industry, run by a management team jointly appointed by the acquiring parties.
ENDS
Get the latest issue of FAnews