The asset management businesses of Sanlam and Old Mutual are in discussions with J.P. Morgan Treasury and Securities Services to buy the service providers South African fund administration business.
The two asset managers, Old Mutual Investment Group SA (OMIGSA) and Sanlam Investment Management (SIM), who are clients of J.P. Morgan Treasury and Securities Services, will form a joint venture to acquire the fund administration business.
J.P. Morgan declined to comment.
J.P Morgan bought the former TASC fund administration business from Sanlam in 2004. At the time of the acquisition, the company had R320 billion of AuA and was the countrys largest independent third party fund administrator. As part of the disposal of TASC, Sanlam agreed to outsource investment administration services to JP Morgan for a period of 10 years. In December 2006 an agreement was reached for the outsourcing of Old Mutual Asset Managements
investment administration operations to J.P. Morgans Worldwide Securities Services business.
According to Bloomberg, which first reported the discussions were taking place, SIM head Johan van der Merwe said: JPMorgan had very good intentions when it started the business but has strategically decided to exit. JPMorgan is being very accommodating.
According to the report, Van der Merwe said the TASC unit now has at least 200 employees who are likely to be moved into Sanlam and Old Mutuals joint-venture company. He added that the business has $127 billion of assets under administration.
(JDC)