China’s HNA buys stake in Old Mutual’s AM unit

The Chinese conglomerate, whose businesses range from aviation to financial services, has made its second acquisition in the US in a month as its continues its overseas push.

A unit of the Chinese conglomerate HNA Group has agreed to acquire a minority stake in OM Asset Management, Old Mutual’s US asset management business for approximately $446 million.

According to a company statement, HNA Capital will own a 24.95 percent stake in OM Asset Management (OMAM) once the transaction is completed, reducing UK-headquartered financial services company Old Mutual’s shareholding from 50.8 percent to 25.9 percent.

The two-step transaction process would see HNA acquire a 9.95 percent tranche of OMAM shares held by Old Mutual at $15.30 per share, and a sale of a further 15 percent held by the firm at a price of $15.75 per share. The first tranche is expected to be completed in around 30 days, as per the statement.

OMAM had approximately $240 billion of assets under management as of end December, 2016.

Bruce Hemphill, group chief executive of Old Mutual, said: “We are very pleased to announce this transaction which brings forward further realization of value for Old Mutual. It represents another step in delivering our managed separation strategy and secures a strategic long-term investor for OMAM.”

“OMAM is a diversified, at-scale, multi-boutique asset management franchise with an attractive portfolio of high quality investment managers. We are pleased with our investment in OMAM and look forward to supporting OMAM’s continued growth,” commented Guang Yang, chief executive of HNA Capital US.

For HNA, the acquisition is a continuation of its aggressive overseas investment push. The owner of China’s fourth-largest carrier Hainan Airline has been part of some landmark property buys in the US and London via its various subsidiaries. Earlier this month, it led a joint venture group that has agreed to acquire 245 Park Avenue, a 45-story office tower in New York, from Brookfield Asset Management and New York State Teachers’ Retirement System for $2.2 billion, according to PERE reports.

This was preceded by the acquisition of a 25 percent stake in the Hilton hotel chain from Blackstone in October, and the $189 million deal to acquire a commercial building in London’s Canary Wharf in April.