Quilter, formerly Old Mutual Wealth Management, will in the next few months launch an odd-lot offer to its 200,000 retail shareholders, mainly South Africans in possession of the UK-domiciled company’s shares.
The group, spun off from Old Mutual in 2018, has set aside nearly R400m to buy out 190,000 South Africans and 10,000 British citizens.
The odd-lot offer entails Quilter making an offer to eligible shareholders holding less than 200 shares, to repurchase those shares at a 5% premium.
“We expect to launch it in the second half and will provide more detail to shareholders in due course. It is less about reducing complexity but more about reducing the cost of servicing our register — this will be achieved through lower post costs, etc,” CEO Steven Levin said, in a wide-ranging interview with Business Day.
“Most of these shareholders did not actively choose to be shareholders in Quilter. They obtained their shares through the demerger from Old Mutual — this provides them with a cost-effective means of selling their shares at a modest premium to the market price.”
The leadership of the British multinational wealth management company visited SA last week to engage with its institutional shareholders, who include Coronation, Allan Gray and the Public Investment Corporation. The three-day road show follows the group’s first-half results in which it reported a 25% rise in adjusted profit and an improved operating margin.
While domiciled in the UK, with headquarters in London, SA asset managers still hold about 60% of Quilter’s stock.
Levin, who took over the role in November, said the reception from the SA investors is positive and they are in support of the company’s strategy.
“We don’t disclose the details of private conversations with shareholders, but we can confirm that shareholders were generally pleased with the recent performance of the company (interim profit up 25%) and remain supportive of the management team and strategy,” Levin said.
Cash hub
Quilter oversees £101.9bn in customer investments as at March 31, 2023. The group, which has a primary listing in London and a secondary listing in Johannesburg, has an adviser and customer offering spanning financial advice, investment platforms, multi-asset investment solutions and discretionary fund management.
As part of its strategy to diversify its offering to its clients, Levin said the company will later in 2023 launch a “cash hub” in response to higher interest rates, which has made cash more attractive to clients.
“The advent of higher global interest rates means that cash is now seen as an attractive investment alternative for retail clients. To this end, we intend to enhance our support of cash as an asset class. This will allow clients to hold cash and fixed-term deposits alongside their other platform assets and obtain market leading rates. We will make a small margin on any cash invested through the hub,” Levin said.
“My objective is simple — to retain our customer focus while making Quilter more efficient and responsive to the external environment and to drive the faster growth and higher returns our shareholders expect,” he said.
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