During our ownership, Phoenix Group (formerly Pearl Group) was one of the UK’s largest life assurance businesses, managing approximately £70 billion of assets for over five million policyholders. The business specialised in acquiring and managing closed books of life and pension policies, including unit-linked, with-profits and annuity products, generating stable, predictable cash flows backed by long-duration liabilities.
Initial investment
2005
Sector
Financial Services
Initial transaction size
£1.1bn
Having spent time analysing the life assurance industry in the early 2000’s, we saw a clear dislocation between Phoenix’s market valuation and the stable, highly predictable cash flows embedded within its portfolio.
The business operated with an uncompetitive cost base and lacked sophisticated asset and liability management capabilities. We saw significant opportunity to unlock value through operational improvements, optimised capital structures and enhanced liquidity-driven investment and risk management strategies. With disciplined execution, we believed Phoenix could transition from a declining closed book operator into a market-leading consolidation platform capable of substantial acquisitive growth.
We transformed Phoenix from an uncompetitive closed life business into a scalable platform capable of industry consolidation. Core operational improvements included driving cost efficiencies, simplifying back-office processes and outsourcing key service company functions.
We strengthened the organisation’s technical capabilities by creating dedicated asset, liability and risk management functions to improve returns and risk management, hiring a new CIO, a new Head of Risk and a team of quantitative specialists.
In 2008, we supported the acquisition of Resolution plc, Phoenix’s principal competitor and a FTSE 100 company. This consolidated the group’s leading position in the closed life sector and realised meaningful cost synergies and improved capital efficiency.
Following a reverse takeover of Liberty Acquisition Holdings in 2009, the company was subsequently admitted to the London Stock Exchange and joined the FTSE 250 index in 2010.