 Phoenix Group is the largest UK consolidator of close life assurance funds.
The principal funds are Phoenix Life, London Life, NPI, Pearl Assurance and Scottish Mutual International. The policies offered by these funds include unit-linked policies, annuities and with-profit policies. Today Phoenix Group (formerly 'Pearl Group') manages over £67 billion of assets for around 6 million policyholders, making it the UK's largest consolidator of life assurance funds that are closed to new business.
Transaction
TDR and Sun Capital Partners, acting through Life Company Investor Group, purchased the closed life insurance businesses of HHG plc in April 2005. In 2008 Pearl took private the FTSE 100 company Resolution plc in a £5.5 billion transaction. In September 2009 Pearl Group Limited reversed into Liberty Acquisition Holdings (International) Company, a Euronext-listed company. In July 2010 Phoenix Group transferred to a Premium Listing on the London Stock Exchange.
Investment Overview
We believe that closed life assurance and pensions schemes generate stable and predictable cashflows, which are generally insensitive to the principal external risks in the industry. However, we felt that many 'closed' funds were being undervalued both by the application of an unduly high discount rate and as a result of negative market sentiment driven by industry wide mis-selling issues. We thought there were potential upsides in owning closed book life funds because we believed that this was an opportunity to operate more sophisticated liability and asset management programmes and to take advantage of potential improvements in the administration of the policy-holder business.
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