Fund managers buy J.P. Morgan fund admin business in South Africa
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Fund managers buy J.P. Morgan fund admin business in South Africa 08 May 2012Cape Town Reporter: Mark Dugdale
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South Africa-based Old Mutual Investment Group Holdings and Sanlam Investment Holdings have agreed to purchase the shares of J.P. Morgan Administration Services.
J.P. Morgan Administration Services administers assets on behalf of its third-party clients, including Old Mutual Investment Group and Sanlam Investment Management, in South Africa.
It operates a full-service model, incorporating standard administration services with tax, accounting, unitisation, net asset value pricing and reporting services.
Diane Radley, CEO at Old Mutual Investment Group, said that investment administration services are “essential” and should “benefit the client by providing reliable and accurate service at the lowest possible cost”.
She added: “As the two key clients of J.P. Morgan Administration Services, clearly it is in the best interest of Old Mutual Investment Group and Sanlam Investment Management 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.”
The deal is subject to regulatory approval and is expected to take effect on 1 September 2012.
The acquiring parties will operate J.P. Morgan Administration Services as a separate entity and going concern from its present location in Cape Town. The existing service level agreements they have with J.P. Morgan Administration Services will remain in place.
It will also continue to act as an independent third-party administrator for the asset management industry in South Africa. The acquiring parties will jointly select its management team.
“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,” said Francis Jackson, head of J.P. Morgan Worldwide Securities Services in Europe, Middle East and Africa.
“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.”
Robert Roux, COO at Sanlam Investment Management, said: “After J.P. Morgan completed a strategic review … [we] 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 financial details of the transaction were not disclosed.
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