Colonial is seeking to buy a building society and fund manager following the recent shutdown of its IFA life and pensions operation.
The Australian-owned life office is understood to have looked at Stroud & Swindon and Skipton in addition to targeting a fund management operations.
Colonial ditched its IFA life and pension arm last month, spelling the end after a two year attempt to break into the market The company is relying on 58 tied franchises and asset manager Colonial First State Investments.
MM revealed last week that Colonial has retained just a "handful" of the 900-strong Gan salesforce which it bought for £17m.
In a statement Colonial says: "Colonial continues to expand and develop its UK operations and is actively pursuing acquisition opportunities in the UK marketplace."
But a source close to the company says: "The bottom line is that they do not have much market share left – it was one per cent a year ago. Unless they build critical mass shareholder value will be affected. It could be looking for a fund manager but a building society would fit in terms of distribution."
Experts suggest if the life office's acquisition trail is unsuccessful it may decide to give the UK market up as a bad job and pull out.
Another source says: "Colonial has been looking to buy a building society for a long time. It wouldn't surprise me if the company pulled out as there are easier markets to grow in south-east Asia. Its supposed commitment to the UK always seemed like hot air."