IPO Report: OM Asset Management Ltd (OMAM)

Francis Gaskins |

OM asset management IPO, IPO report, IPOs this week, stocks to buy now, small-cap stocksBased in London, OM Asset Management Ltd ($OMAM)  scheduled a $352 million IPO with a market capitalization of $1.9 billion at a price range midpoint of $16 for Thursday, Oct. 9, 2014 on NYSE. SEC filings

Manager, Co-managers: BofA Merrill Lynch, Morgan Stanley, Citi, and Credit Suisse.

Joint-managers: RBC Capital Markets, Wells Fargo Securities, Keefe Bruyette Woods, Sandler O'Neill, and Sanford Bernstein.

Seven other companies are scheduled for the week of Oct. 6, 2014. The full IPO calendar is available at IPOpremium.

OM Asset Management IPO Report

Overview

OMAM is a global, diversified, multi-boutique asset management company with approximately $214.9 billion of assets under management as of June 30, 2014. OMAM currently operates its business through seven boutique asset management firms, which OMAM refers to in this prospectus as its Affiliates.

Valuation

Glossary

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing June 6 mos

         

OM Asset Management Ltd (OMAM)

$1,920

3.3

14.3

-42.4

-11.1

18%

Conclusion

Neutral

14.3 P/E, 100% to selling shareholders

Assets under mgt +23.6%

Total Economic Net Income (ENI) +16%

Post-tax ENI +14.2%

1.8% potential annualized dividend

Business

OMAM is a global, diversified, multi-boutique asset management company with approximately $214.9 billion of assets under management as of June 30, 2014. OMAM currently operates its business through seven boutique asset management firms, which OMAM refers to in this prospectus as its Affiliates.

OMAM is currently a wholly-owned indirect subsidiary of Old Mutual plc, an international investment, savings, insurance and banking group established in 1845.

OMAM’s business model combines the investment talent, entrepreneurialism, focus and creativity of leading asset management boutiques with the resources and capabilities of a larger firm. OMAM has a permanent partnership structure with its Affiliates that preserves the unique culture that has made each of them successful and provides them with investment and day-to-day operational autonomy.

OMAM ensures that key management professionals at each Affiliate retain meaningful levels of equity in their own businesses to maintain strong alignment of interests between OMAM, its Affiliates, their clients, and OMAM’s shareholders. OMAM’s approach to investing in Affiliates includes a profit-sharing arrangement to provide incentives for growth and prudent business management across multiple generations of Affiliate partners.

OMAM has broad and deep experience in working with boutique asset managers, and OMAM leverages the expertise and resources within its organization to engage actively with its Affiliates and provide them with capabilities generally unavailable to specialist asset management firms.

OMAM works with Affiliates to identify and execute upon growth opportunities for their businesses in areas such as business line expansion and product development, as well as activities critical to the operational success of investment boutiques, including talent management, risk management and compliance support.

OMAMs’ Company-led Global Distribution team complements and enhances the distribution capabilities of its Affiliates. Furthermore, OMAM’s collaboration with its Affiliates extends to the commitment of seed and co-investment capital to launch new products and investment capital to financially support new growth initiatives.

Intellectual property

Immediately prior to the completion of this offering, OMAM intends to enter into an intellectual property license agreement with OMUSH, OMAM’s Parent, and, solely for the intellectual property owned by it applicable to the agreement, OMLACSA, which OMAM refers to as the Intellectual Property Agreement.

Pursuant to the Intellectual Property Agreement, OMAM’s Parent and OMLACSA will grant OMAM a limited, non-exclusive, fully paid-up, royalty-free, non-transferable, non-sublicensable license to use certain trademarks, servicemarks, names and logos, including the names "Old Mutual", "OM" and the "OM 3 anchor design logo" or collectively, the Transitional Servicemarks, with respect to OMAM’s business and in connection with this offering, worldwide, subject to certain exceptions set forth in the Intellectual Property Agreement. OMAM’s Parent and OMLACSA will also grant OMAM a perpetual, limited, non-exclusive, fully paid-up, royalty-free, non-transferable, non-sublicensable license to use the term "OMAM", or the Perpetual Servicemark, and collectively with the Transitional Servicemarks, the Servicemarks, in all or part of OMAM’s corporate or trade names, businesses and activities, including in any advertising or promotional materials, and as a ticker symbol, and the perpetual right to use "OM Asset Management" in all or part of OMAM’s corporate or trade names. Likewise, OMAM has been licensed the perpetual right to use omam.com.

Competition

At the Company level, OMAM competes with other acquirers of investment management firms, including investment management holding companies, insurance companies, banks and private equity firms.

OMAM’s Affiliates compete globally with international and domestic investment management firms, hedge funds and other subsidiaries of financial institutions for institutional assets.

5% shareholders pre-IPO

Old Mutual plc 100%

Dividend Policy

OMAM will initially target a dividend payout in the range of 25% of ENI, subject to maintaining a sustainable quarterly dividend per share. Any declaration of dividends will be at the discretion of OMAM’s Board of Directors and subject to the approval of its Parent (for so long as it is required under the Shareholder Agreement), and will depend on its financial condition, earnings, cash needs, regulatory constraints, capital requirements and any other factors that its Board of Directors or Parent deems relevant in making such a determination.

Use of proceeds

OMAM will not receive any proceeds from the sale of ordinary shares in this offering, including from any exercise by the underwriters of their over-allotment option.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
OMAM OM Asset Management plc 15.49 0.26 1.71 308,057

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