OLD Mutual's wealth arm is to buy money manager Quilter Cheviot from European private equity house Bridgepoint for £585 million.

The purchase brings Old Mutual Wealth's assets under management to £92 billion, a rise of more than

20 per cent.

The transaction also increases Old Mutual's exposure to the lucrative wealth management market, which is forecast to grow by between six and eight per cent a year.

Julian Roberts, Old Mutual chief executive, said the acquisition of Quilter would allow the company to offer services to clients with more than £1m to invest.

He said: "What Quilter does is to take us into the high net worth (clients)."

Quilter Cheviot has offices in Edinburgh and Glasgow while Old Mutual recently announced plans to open in the Scottish capital.

Old Mutual said it aimed to achieve annual cost savings of £15m by 2017.

Eamonn Flanagan, analyst at Shore Capital, kept his hold recommendation on the stock and said: "This is a smart, well-priced deal for Old Mutual."

Old Mutual said the deal was likely to put an end to its acquisition activity in Britain.