Blackstone have sold their 36% share in Rothesay Life to MassMutual and GIC for £2.1bn ($2.69bn).
The transaction, which values Rothesay Life at £5.75bn, will leave MassMutual and GIC as two equally substantial shareholders with a 49% stake each.
American insurance firm – MassMutual – and Singaporean wealth fund – GIC – are expected to continue to provide long-term support for the group’s growth and development.
Rothesay Life has seen tremendous growth since Blackstone’s initial investment in 2013, with their AuM rising from £7.5bn to £56bn between 2013 and 2020. In 2019, the group saw a record £16.3bn worth of new business alongside continued growth in the first half of 2020.
After an initial acquisition of a 29% stake, Blackstone slowly boosted their investment, backing growth and buying out other shareholders such as Goldman Sachs in 2017. Quasim Abbas, Senior Managing Director at Blackstone, commented: “MassMutual and GIC are the natural long-term holders for Rothesay and we wish both the company and the shareholders continued success going forward.”
Rothesay Life, established in 2007, is one of the UK’s largest pension insurers managing over £50bn of assets and paying the pensions of over 800,000 people. A steady accumulation of pension scheme clients, significant strategic acquisitions and the reinsurance of annuity portfolios have facilitated their strong levels of growth. This is evidenced by the group’s latest valuation, which is significantly greater than their 2017 valuation of £2.1bn, when Goldman Sachs sold their 33% share.
Concerning the substantial increase in investment from GIC and MassMutual, Addy Loudiadis, CEO of Rothesay Life, said: “This is a strong expression of confidence in the company…Rothesay will continue to differentiate itself by providing a full range of solutions on a large scale, as well as by taking full advantage of strategic prospects with a value and risk-driven approach to underwriting”.
Current Rothesay Life clients include the pension schemes and customers associated with names such as Asda, National Grid, Prudential and British Airways.
Completion of the transaction is subject to regulatory approval.