Pearl Sees Insurance Acquisitions of More Than $840 Million
Bloomberg – 11 November 2009

Pearl Group Ltd, the U.K.’s biggest manager of closed life-insurance funds, is looking to make purchases of at least 500 million pounds ($840 million) once it has obtained a primary listing in London.

“It would be unlikely we would want to do a deal of less than 500 million pounds in size because it’s just a lot of extra complexity for not much added value,” Chief Executive Officer Jonathan Moss said today in a call with reporters. Potential acquisitions may be worth as much as 5 billion pounds, he said.

Pearl is on the lookout for acquisitions after being taken over by Liberty Acquisition Holdings (International) Co earlier this year and securing a 600 million-euro ($900 million) capital injection from the buyout company. The insurer sought extra funding after it was unable to refinance its debt burden, which rose after it bought Resolution Plc for 5 billion pounds in 2007.

“Many of the new business writers, their old with-profits funds are in run-off, they tie up a lot of capital and that means there will be opportunities to acquire,” Moss said.

Sales of so-called with-profits policies, life insurance with a savings element that smoothes returns over time, have dwindled in the past five years due to relative underperformance and mis-selling allegations.

Pearl is planning a primary listing in London next year as the majority of its assets are based in the U.K. The stock is currently traded under Liberty’s old listing.

The insurer is also applying for a secondary listing in London and said dealing in ordinary shares will commence on the London Stock Exchange’s main market next week.

Pearl’s assets under management climbed to 70.7 billion pounds in the three months to Sept. 30, the Amsterdam-based insurer said today in a statement. Pearl’s operating cashflow was 338 million pounds in the first nine months of the year.