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Nvesta for sale as Eurolife seeks to cover liabilities

Eurolife Assurance Group is being forced to sell off Nvesta to cover liabilities and pay compensation to policyholders.

EAG went into administration in August when it could not pay a £700,000 instalment of a five-year compensation deal for policyholders who invested £17m in its secured bonds in 1999.

Industry sources estimate Nvesta has around £120m in assets under management spread across its book of structured products and this could grow to around £140m by the time the plans mature in 2012.

Nvesta claims there is potential to generate more than £2.5m over the next four years from recurring revenue and commission on sales of replacement products to holders of maturing plans. It is looking for an investor to buy its book of business or buy the firm outright. It has 12,000 plan holders, whose products were sold mainly through IFAs.

It is issuing an information memorandum subject to interested parties signing a confidentiality agreement.

Nvesta finance director Simon Bottomley says it had no alternative but to close to new business and enact a run-off plan. He says: “The sale of Nvesta offers an opportunity for a buyer to fast track into the structured product sector. Alternatively, a buyer with an existing structured product business could take on the book with minimal additional overhead, adding most of the revenue generated to their bottom line.”

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