By Marion Dakers, Financial Services Editor
London-listed insurance group Old Mutual has sold off its bond manager Rogge to rival Allianz, becoming the latest international insurer to rejig its business.
Rogge, which is based in the capital and has been on the market for several months, manages nearly £25bn but has been struggling with outflows in the face of dwindling appetite for low yields and recent volatility attached to bonds.
Some of the City’s biggest investment firms have considered buying Rogge to bolster their fixed income businesses. Aberdeen Asset Management is thought to have weighed up an offer but stepped away before the end of the sale process.
Olaf Rogge, founder and executive chairman of his eponymous firm, said that “having had discussions with a number of interested parties, we are convinced that the combination with AllianzGI will be in the best interests of clients and will ensure the continued future growth of RGP’s successful investment approach”.
Rogge posted net outflows of £4.3bn for the third quarter of last year, and flagged that the exodus of client money was set to continue “in the near term, albeit at a slower pace”.
Old Mutual took over the firm in 2000 when it acquired United Asset Management. Under new chief executive Bruce Hemphill, the Anglo-South African group is continuing its push into new businesses across Africa, having part-floated its US asset management arm and acquired the London wealth manager Quilter Cheviot in 2014.
Allianz Global Investors, part of the German insurance giant Allianz, manages €427bn on behalf of clients, about a third of which is in fixed income strategies.
“The two businesses are a natural fit – in terms of both product mix and culture – and we really look forward to working together closely for our clients’ mutual interests,” said Andreas Utermann, the chief executive-elect of AllianzGI.
The firms have not revealed how much Allianz has paid to take over Rogge.
This is the latest in a line of deals among global insurers and investment houses looking to shake up their businesses as low yields and capital requirements exert pressure on their ability to generate returns to cover the cost of claims and long-term policies.
More than four in five insurance leaders worldwide are planning an acquisition, according to recent research by Willis Towers Watson, after a year of banner deals that included the merger of Aviva and Friends life, as well as Ace’s $28bn acquisition of Chubb.