Old Mutual sells US unit for $350m

The sprawling Anglo-South African financial conglomerate Old Mutual has sold its US life insurance business in a drive to simplify its structure.

The disposal, unveiled alongside forecast-beating interim profits, is the first step in a strategic overhaul to slim down Old Mutual, an insurer, bank and fund manager operating in 35 countries, amid investor concerns its complexity has held back the share price.

Old Mutual is selling the unit to the hedge fund Harbinger Capital Partners for $350m (£221m). The proceeds will be used to repay debt.

The chief executive, Julian Roberts, declined to comment on whether the restructuring will also include a sale of Old Mutual's flagship asset, its majority stake in Nedbank, South Africa's fourth-biggest lender. Standard Chartered and HSBC are both believed to be interested in buying a stake in Nedbank.

Old Mutual's half-year profit jumped 43 per cent to £735m, beating the £681m pencilled in by analysts. The improvement was driven in part by cost cuts as Old Mutual took out £42m in expenses from a total target of £100m.