US Asset Management

Key facts

• Adjusted operating profit (pre-tax) £87m 2009: £83m
• Selected affiliates
• Number of employees 1,537 2009: 1,544
• Funds under management £166.6bn 2009: £161.5bn
• 

USAM affiliate capabilities

Over 160 investment strategies across a wide array of categories US Equities Global & Non-US Equities Fixed Income Alternatives Large, Mid, Small, Micro, All-Cap Growth, Value, Core Fundamental, Quantitative Global, International, Regional, Country Specific Large, Small, All-Cap Developed, Emerging, Frontier Markets Long Duration, Intermediate, Short-Term Core, Core Plus, High Yield Stable Value Liquidity Management, Money Market TIPS Global, International, Emerging Markets 130/30 Long/Short Variable Bias Market Neutral Absolute Return Global Tactical Asset Allocation Portable Alpha Hedge Fund Seeding Hedge Fund Emerging Managers Options Overlay Managed Futures Volatility Management Currency Management Real Estate (Public, Private, Global) Timber
Full offering of investment vehicles
Mutual Funds Separate Accounts	Commingled Funds Collective Trusts	Hedge Funds Fund of Hedge Funds
Designed to meet investor needs
High Net Worth Individual Investors Sub-Advisory	Plan Sponsors (Private & Public) Endowments & Foundations Corporations	Defined Benefit Defined Contribution Taft-Hartley

Not all strategies are offered in all vehicles.

Markets and strategy overview

The investment environment in 2010 was characterised by a continued rebound in equity markets globally, although investors remained cautious in the wake of the global financial crisis. As a result, fixed income and alternative strategies remained in high demand among both individual and institutional investors while equity strategies (excluding emerging markets) broadly experienced outflows.

Profits up 4% on higher average FUM, improving investment performance as markets began returning to fundamentals

Highlights ($m, unless otherwise stated)	2010	2009	% Change
Adjusted operating profit (IFRS basis, pre-tax)	135	130	4%
Return on Capital	4.2%	4.1%
Operating margin	18%	18%
Net client cash flows ($bn)	(18.0)	(7.1)	(254%)
Funds under management ($bn)	259	261	(1%)
Adjusted operating profit (IFRS basis, pre-tax) (£m)	87	83	5%

USAM seeks to become the leading multi-boutique investment organisation globally, with several sources of competitive advantage:

• A proven model for multi-boutique management. Over the past 10 years, USAM has demonstrated the ability to manage and develop a diverse portfolio of investment firms successfully. Our boutiques enjoy investment autonomy and equity incentives that attract and retain talented investors and promote business continuity. We enhance our boutiques' growth and profitability through central services, including distribution, product development, capital support, strategic planning, risk management and a scaled shared services platform.
• Investment-focused and broadly diversified. As boutique investment managers singularly focused on asset management, our firms succeed when our clients succeed. Our boutiques invest with conviction and discipline, employing rigorous and consistent investment processes focused on delivering long-term results. Our firms serve institutional and individual investors around the world and benefit from the insights gained through a global client base.
• Well-positioned for profitable growth. Our boutiques offer sought-after traditional and alternative products with significant FUM capacity. Capital investments offer the potential to accelerate growth by funding acquisitions and lift-outs, seeding new products, and making operating investments. With access to the breadth and depth of a large international financial services company like Old Mutual, USAM is well-positioned to continue its expansion outside the US.

USAM represents an attractive business partner for talented investment managers. The business continues to invest in growth by expanding investment capabilities and growing its global client base through international distribution.