Evaluating Strategic Alternatives for Oaktree-Utmost: Insights from a Portfolio Allocation Perspective

Oaktree Capital’s Strategic Moves: Evaluating Options for Utmost Group

Oaktree Capital Management is actively considering its next steps for Utmost Group Plc, its UK-based wealth management arm. The firm is weighing both a potential sale and an initial public offering, with early discussions suggesting Utmost could be valued at approximately £2 billion. This initiative is part of a larger trend of mergers and acquisitions within the UK’s insurance and wealth management landscape, as Oaktree looks to unlock value from an investment it has supported since the company’s inception in 2013.

Oaktree’s rationale centers on optimizing returns and portfolio management. A sale or IPO would allow the firm to realize liquidity from a robust asset, freeing up capital for new opportunities. For institutional investors, Utmost offers a glimpse into a stable, well-capitalized business model. The company’s transformation in 2024 was marked by the acquisition of Lombard International and its entry into the UK pension risk-transfer sector, moves that have significantly bolstered its financial position. Following these changes, Utmost’s net Solvency II EV surpassed the £2 billion threshold.

Utmost’s Growth and Market Position

Utmost’s valuation is underpinned by its impressive scale. By mid-2025, the group managed over £100 billion in assets under administration, factoring in the Lombard acquisition. This substantial asset base highlights Utmost’s leadership in the sector. The company’s 2024 performance was strong, with £6.8 billion in inflows—a 6% increase year-over-year. This blend of size, capital strength, and consistent growth makes Utmost an attractive candidate for a public listing or strategic sale.

The JAB Insurance Transaction: Strategic Impact

Utmost recently agreed to sell its UK life and pensions division to JAB Insurance, a move expected to close soon and valued at £250 million. The proceeds will be used to pay down debt incurred during the Lombard International acquisition, further strengthening Utmost’s balance sheet. This transaction is a clear win for capital management, reducing leverage and enhancing financial flexibility.

However, this divestiture also reshapes the company Oaktree may bring to market. By selling a unit overseeing over £5 billion in assets, Utmost becomes a more focused, albeit less diversified, entity centered on insurance-linked investment products for high-net-worth clients. This specialization could impact the valuation premium typically associated with broader wealth management platforms, as the company’s overall asset base is reduced.

The structure of the JAB deal is also noteworthy. JAB Insurance, based in Luxembourg, has a track record of consolidating consumer brands and is now expanding into life insurance, including a recent agreement to acquire Prosperity Life Group. By purchasing Utmost’s UK life and pensions business, JAB gains immediate access to the UK pension risk-transfer market, which is projected to see over £500 billion in demand over the next decade. This suggests the transaction is a strategic move within a broader industry consolidation.

For Oaktree, the sale to JAB serves two purposes: it provides immediate capital to reduce debt and streamlines Utmost into a more focused business, potentially making it more appealing for a future IPO. By exiting legacy insurance operations and concentrating on wealth management, Utmost can present a clearer, more attractive investment proposition to public markets.

Industry Trends and Institutional Investment Flows

Utmost’s recent developments reflect a larger shift of institutional capital into the UK’s wealth and insurance sectors. This trend is not unique to Oaktree; for example, NatWest’s recent £2.7 billion acquisition of Evelyn Partners demonstrates that major financial institutions are actively seeking to expand their wealth management capabilities. Such moves set a precedent for other firms to pursue similar exits or public listings for their UK assets.

Institutional investors are primarily interested in platforms with significant asset management scale and fee-generating assets under administration, rather than simply betting on a recovery in the London market. Utmost’s strategic shift, culminating in £103.5 billion in assets under administration, is a key driver of value. The JAB Insurance deal, while tactically beneficial, enables Utmost to focus on its core wealth solutions business and capitalize on the substantial growth potential in the UK pension risk-transfer market, which is expected to generate over £500 billion in demand in the coming decade. This environment favors firms with the financial strength and regulatory credentials to participate in this expanding sector.

From a portfolio perspective, Utmost’s evolution aligns with a sector rotation toward quality and sustainable growth. The company’s transformation has created a robust platform with a clear growth trajectory, positioning it as a lower-risk, high-conviction investment within a consolidating industry. A standalone valuation near £2 billion would reflect the improved quality and growth prospects of the business. Institutional investors are increasingly drawn to companies that are not only resilient but are also actively adapting their models to capture long-term, fee-based revenue streams. Utmost’s journey from a niche insurer to a leading wealth manager with a presence in the pension risk-transfer market exemplifies this shift.

Key Catalysts and What to Watch

The imminent announcement of the JAB Insurance deal, valued at £250 million, is a short-term catalyst that will enhance liquidity and strengthen the balance sheet. For investors, the main focus will be on the quality of the remaining business. With Utmost now centered on its international unit serving affluent clients, the market will assess whether this more specialized platform can command a premium valuation in a sale or IPO.

Looking ahead, Oaktree’s ultimate decision—whether to pursue a sale or a public listing—will depend on market conditions and its capital allocation strategy. A sale would provide immediate returns, while an IPO could unlock additional value for the restructured business. The outcome will reveal whether the market perceives enough quality and growth potential in the streamlined Utmost to justify a premium valuation.

• Proforma AUA Growth: Investors will closely monitor the trajectory of assets under administration, especially after the Lombard acquisition and the JAB divestiture. In 2024, Utmost achieved £6.8 billion in inflows, a 6% increase, but the sustainability of this growth remains a key question.
• Net Inflows and Retention: While gross inflows were robust, the company reported a net outflow of £0.4 billion in 2024. The ability to convert market opportunities into net client capital will be a critical measure of management effectiveness and business resilience.

In summary, the coming weeks will clarify the immediate benefits of the JAB transaction, while the following months will test the strength and appeal of the standalone Utmost platform. For investors, the central question is whether Utmost can deliver on its growth ambitions and maintain a strong, focused position in a rapidly evolving market.