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By Karolin Schaps
LONDON (Reuters) - Financial services group Old Mutual's (L:OML) wealth arm is to acquire investment management firm Quilter Cheviot for 585 million pounds from European private equity house Bridgepoint.
The takeover will create a combined group with 92 billion pounds of funds under management and Old Mutual said it aimed to achieve annual cost savings of 15 million pounds by 2017.
"The acquisition of Quilter Cheviot delivers the final substantive part of our investment programme in the UK towards building a vertically integrated wealth management business of scale in the UK," Old Mutual Chief Executive Julian Roberts said in a statement on Friday.
The deal will increase Old Mutual's exposure to the lucrative wealth management market, which is forecast to grow by between 6 and 8 percent a year. Britain's affluent population represents around 55 percent, or 1.7 trillion pounds, of the country's wealth market, the company said.
Bridgepoint achieved an internal rate of return of 55 percent from the sale of Quilter Cheviot, a source familiar with the deal said.
Old Mutual shares were up 0.3 percent at 170 pence in early London trading.
(Editing by Susan Thomas and David Holmes)