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1bn cash deal for exAMP closed life funds

HHG, the company holding the former AMP UK businesses, has sold its closed life books to Life Company Investor Group for 1.025bn in cash.

The break-up of the businesses left by AMP’s return to Australia sees the closed life insurance and pension books of Pearl, National Provident Life, NPI and London Life taken over by Life Services.

Following completion of the deal, it is expected that the remaining businesses of Henderson Global Investors and Towry Law will be renamed Henderson Group.

The deal will result in a return of 875m in cash to shareholders in exchange for cancellation of shares.

Life Company Investor Group is a UK-based company established by Sun Capital Partners and TDR Capital which make long-term investments in closed life funds.

Sun Capital chairman Hugh Osmond is known for deals involving Punch Taverns and Pizza Express.

The existing management team of Life Services will stay in place, with managing director Ian Laughlin heading the operation.

HHG chief executive Roger Yates says: “This deal offers a good price in relation to embedded value. It provides certainty of outcome, it transfers significant pension liabilities and it provides revenue protection for Henderson.”

Hargreaves Lansdown head of pension research Tom McPhail says: “There is an interesting trend in buying up comatose life companies. Resolution Life’s approach to Old Mutual is interesting but Sun Capital is less clear. It should offer investors some comfort but this view is diametrically opposed to the reality that it has done the deal to make profit.”

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