Deal off

Old Mutual South Africa has terminated negotiations with Standard Bank of South Africa and The Bank of New York regarding the establishment of an SA-based joint venture investment administration company.

The decision comes after several months of in depth discussions between the various stakeholders, including the regulatory authorities, with a view to launching a new administration platform.

Unfortunately regulatory constraints have made it impossible for Standard Bank to participate as a shareholder in the proposed administration business because the FSB regarded the bank's equity participation in the venture as being in potential conflict with its obligations as a trustee.

"Without Standard Bank's participation, we believe that the proposed business is less attractive," says Henk Beets, COO at OMAM. "Our financial analysis leads us to conclude that equity ownership in a smaller scale operation is not a route we want to follow."

According to the statement OMAM (SA) remains convinced of the benefits of outsourcing its mid- and back-office administration activities.

“…It will therefore continue to seek a professional, focused administration service provider that has the required capability. But it will do so on the basis of an arms-length lift-out of its own operations, rather than as a shareholder in the venture, says Beets….”