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Friendly gets £5m go-ahead

The Pension Annuity Friendly Society has been given the go-ahead to demutualise by its policyholders in a move that will secure a £5m war chest.

The demutualisation, exclusively revealed in Money Marketing in June, will see Pafs rebranded as Partnership Assurance and pay out £6.2m in windfalls to 7,800 members who will get a minimum of £500 each.

This capital, along with the £5m development funds and the transaction costs, is being provided by venture capitalist Phoenix Equity Partners, which is taking a 77.3 per cent equ- ity stake. The cash will be spent on upgrading infrastructure and funding new business.

Phoenix will have a representative on the board while the four Pafs executives keep their seats and Ian Owen, formerly managing director at Zurich UK Personal Lines, joins as independent chairman.

Pafs chief financial officer Steve Groves says Phoenix is committed to maintaining its stake for at least three to five years. He says: “We are the first friendly society to demutualise. We have significant growth targets and are looking to move into new lines of business.”

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