Colonial says talks concerning the sale of its UK life assets are continuing, but declined to com-ment on parties to the discussions.
Colonial says talks concerning the sale of its UK life assets are continuing, but declined to com-ment on parties to the discussions.
London’s Sunday Telegraph newspaper reported that Winterthur Life, owned by Credit Suisse, has offered about $A785 million for Colonial’s British life insurance operations. Winterthur is thought to have been granted exclusive negotiating rights last month.
Talk of a possible sale of Colonial’s UK assets follows news that the acquisition of UK fund manager Stewart Ivory looks set to be cleared for lift-off following unanimous acceptance by the Edinburgh-based group’s shareholders. Colonial announced it had acquired 89.6 per cent of the UK company in February.
Assuming all payments are made, Colonial has put the value of the purchase at $A183.2 million.
A Colonial spokesperson says the deal will have no bearing on the imminent merger of Colonial with the Commonwealth Bank of Australia (CBA).
The combined operation of Colonial First State and Ivory in the UK would manage more than $A23.7 billion and would operate as Colonial Stewart Ivory Investments. The deal would in-crease Colonial’s funds under management worldwide to about $95 billion.
According to Colonial First State, a combined business of that kind will have the investment management strength, product range, infrastructure and critical mass to significantly expand in the UK and provide a platform for future expansion into Europe.
Stewart Ivory managing director John Thompson will become chief executive of the combined entity and Colonial First State investments chief investment officer Mark Burgess will retain that role in the new structure.
Switzerland flag – While Australia’s technology funds market is booming, fund managers around the world continue to jump on the technology bandwagon in an effort to capitalise on the rapid growth of the sector. A recent addition to the technology fund fold is Credit Suisse Asset Man-agement who is set to launch four mutual funds in Europe. Other European tech funds include Martin Currie Investment Management, Edinburgh Fund Managers, Newton Fund Managers and Royal Sun Alliance Insurance Group CSAM, which expects its funds to raise at least $500 mil-lion this year. According to the Association of Unit Trusts and Investment funds, UK investors had $US3.8 billion in tech stock funds at the end of January, a five-fold increase from the year-earlier period.
UK flag — Deutsche Asset Management is to take over management of Prudential’s UK balanced fund business, which has about £12bn under management. Prudential will now focus on retail and pooled pension business, following its £1.9bn acquisition last year of niche fund manager, M&G. Up to 50 wholesale clients will be affected, and not all are likely to move their mandate to Deutsche, which is involved in the merger deal between Deutsche Bank, its parent, and Dresdner Bank. Clients have been served notice, and have about three months to accept the deal or to find an alternative fund manager.
Macedonia flag – QBE Insurance has acquired a major stake in Macedonia’s largest insurer, ADOR Makedonija, acquiring a 60 per cent interest for around $A23 million. Established in 1945, ADOR Makedonija is licensed for both life and non-life insurance. It dominates the market with a 94 per cent market share. Annual premium income consisting mainly of non-life premi-ums, is more than $140 million, according to QBE. A QBE spokesperson says the acquisition complements the company’s plans for expansion in Central and Eastern Europe. The acquisition will provide QBE with further scale and diversity to the already existing operations in Bulgaria, Hungary, Moldova, Slovakia and Ukraine.
US flag – US-based Nationwide Mutual Insurance has purchased UK’s fifth largest pension fund manager, Gartmore, for £1.03bn after a fierce bidding war ramped the sale price up from £550m.
The deal, signed after CGU and ABN Amro dropped out of the running, values Gartmore at 1.9 per cent of assets under management. It creates one of the world’s top 30 financial houses, with funds under management of more than $US200 billion and leaves Schroders as the UK’s last re-maining “big five” pension fund manager. The price is twice as much as analysts thought Gart-more was worth when it was put up for sale by National Westminster Bank last year.
According to company sources, Nationwide unexpectedly clinched the deal by agreeing to make no changes to Gartmore’s management team and its operations.
