This is probably most reminiscent of Aegon’s creation of Origen and purchase of Positive Solutions but is not a carbon copy. First, Pantheon is an established high-net-worth operation. Sesame has ambitions to be all things to all members and users by offering network, multi-tie and directly regulated support services options.
It still has distribution clout but has been dogged by fears over liabilities and its ability to cope with complaints, caught between some rather stern rulings by the ombudsman, some members and former members who believe it did not defend cases robustly enough and the FSA has just stepped in and fined the firm.
Perhaps its was this climate that saw the Misys board opt for a deal rather than continue to back the MBO from Patrick Gale and his team in the hope of getting more money in the long term. The purchase of Pantheon however throws some light on just how much the old school network businesses and support services companies are worth.
The per RI comparison between the two businesses is staggering and this is with Patrick Gale having gone some way to modernise the network.
Industry analyst Ned Cazalet may be correct in the belief that both purchases are distribution plays giving Friends a serious leg up as its plays catch-up in the wrap market. Axa, for example, clearly has similar ambitions for Thinc. But it remains to be seen how much they can turn the deal to their advantage.
Does the fact that Sesame is at least partly a multi-tie mean its members can be directed in a certain direction and how much will Friends ultimately benefit? It still seems that the advisers’ businesses will have quite a lot to say if the business was taken in a direction they did not like.
With another life company in the arena, the dash for distribution may have some way to go before we know the winners.