Old Mutual to stick with Skandia despite losses

Old Mutual will not ‘give-up’ the Skandia brand in Australia and will continue to support its growth, according to Hasan Askari, Old Mutual Asia Pacific chief executive.

Askari, is currently based in the UK but will relocate to Hong Kong to oversee the group’s growth in the region. “Our position is we want Skandia Australia to grow and we’re happy to invest but it’s not as if I’m here writing cheques for this that and the other,”; Askari said on a recent visit to Sydney. Although still reporting losses – Skandia Australia reported a loss of over $6 million last year and Asia Pacific a loss of $3.5 million in the first quarter of this year – Askari said further growth in funds under management would see the group break even this year. He said cost cuts were not planned. The acquisition of Skandia has given the South African company a real presence in Australia and Old Mutual is forecasting a doubling it funds under management from $4.5 billion to $10 billion over the next five years. Old Mutual will continue to run its UK platform – Selestia – separately to Skandia but plans to adapt some of its technology for the Australian Skandia platform. “Selestia is one of the most advanced platforms in the UK. But we’re not going to give up the Skandia brand. There is a value to the brand,” Askari said. Old Mutual’s acquisition of Skandia was publicly hostile, with Skandia vehemently opposing the bid. But that changed to acceptance on the realisation that the bid would be successful, according to Askari. “I don’t think my colleagues in Australia realise what a badly run company Skandia was,” Askari says.