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Partnership to retain enhanced annuity focus following IPO

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Partnership chief executive Steve Groves says the provider will continue to focus on enhanced annuities and long-term care products following its IPO and has no immediate plans to enter the standard annuity market.

Earlier this week, Partnership announced plans to float on the London Stock Exchange. Sources say the flotation is likely to value the insurer at over £1bn.

Partnership says it is aiming to raise around £120m through the IPO.

This is in addition to the sale of at least 25 per cent of the shares currently owned by private equity firm Cinven and Partnership’s management. Cinven owns around 80 per cent of Partnership.

The insurer says the proceeds of the share sale will be used to repay external debt and shareholder loan notes.The IPO is expected to be completed by the end of June.

Partnership has enjoyed rapid growth in recent years. In 2012 it reported pre-tax profits of £112.1m, a 42 per cent increase on the previous year’s figure of £78.7m.

Speaking to Money Marketing, Groves says: “In the long term we expect our growth to tend towards the growth in the annuity market.

“The forecast growth in the annuity market over the next 30 years is in excess of 10 per cent per annum, so not a bad thing.”

Groves says the firm’s growth is likely to come from its existing core markets. He says: “Given the level of growth in enhanced and care annuities, it is likely they will remain our core focus in the coming years.”

Informed Choice managing director Martin Bamford says: “An IPO will give Partnership access to more capital to grow the business and leave it well positioned in the enhanced annuity market.”

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