Reports have emerged placing a pair of Australian firms in the middle of a bidding war for a unit of the Anglo-South African financial services giant.

Two Australian financial services houses have reportedly joined a short list of bidders battling over a £25 billion ($32.9 billion) unit of Old Mutual Wealth set to be up for grabs later this year. 

Challenger and Macquarie Investment Management are among a “small handful” of bidders for Old Mutual Global Investors, a unit of the Anglo-South African business which sits inside Old Mutual Wealth, according to media reports. It is overseen by Richard Buxton, who is known in London's financial services sector as a star stock-picker. 

This publication has reached out to Old Mutual for comment and will update in due course.

The bidding war places the Australian firms among the likes of TA Associates, a private equity house that counts asset manager Jupiter among its former investments. 

FTSE 100 firm Old Mutual is expected to agree on a sale of the unit overseen by Buxton before the end of this year. 

Goldman Sachs is advising Old Mutual on the sale of the unit and on the broader break up of the financial services group.

Last month, reports circulated claiming that Buxton was looking to buy out the unit himself amid talks that he was looking to launch an investment boutique. Old Mutual Wealth declined to comment at the time.