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Rating:PBHG is Centerpiece of Old Mutual's Plans Not Rated 3.0 Email Routing List Email & Route  Print Print
Monday, November 20, 2000

PBHG is Centerpiece of Old Mutual's Plans

Reported by Tamiko Toland

Old Mutual is planning to restructure and better capitalize on the brand of Pilgrim Baxter and Associates. The London-based firm recently purchased United Asset Management, Pilgrim's parent. Now it is paying Pilgrim's two principals $220 million for fifty-two percent of the pair's revenue sharing interests.

Old Mutual retains the option to purchase the remaining interest in a half-dozen installments through 2002 for $420 million. Gary Pilgrim and Harold Baxter had an agreement with United Asset Management which is estimated to pay out thirty-five percent of revenues this year.

Pilgrim Baxter is seen by some as the jewel in the crown of UAM companies despite its troubles several years ago; Old Mutual is now indicating that the company may be fashioned as the centerpiece of a mutual fund multiplex.

"Pilgrim Baxter is a big piece of their plans because they have an excellent brand name," said a spokesman for the firm. "The important thing about this deal is that Old Mutual has made a big investment in Pilgrim Baxter. They have incentivized portfolio managers and key employees at the company."

Old Mutual also plans to franchise sub-advisors and take advantage of Pilgrim Baxter's distribution network. While Old Mutual is diversified across the financial services industry, the UAM acquisition and reorganization indicate a commitment to the mutual fund industry.  

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