Investment banking giant Goldman Sachs has now sold down the remainder of its shareholding in UK pension risk transfer specialist life insurer Rothesay Life, with the stake being picked up by private equity giant Blackstone, Singaporean sovereign wealth fund GIC and insurer MassMutual.
Goldman Sachs offloaded a stake in Rothesay Life back in 2013 to the same trio of investors, as it sought to reduce its interests in insurance and reinsurance business to meet capital rule requirements.
Rothesay Life has regularly been mentioned here on Artemis due to its need to offload longevity risk related to pension risk transfer and annuities transactions it has been involved in, resulting in numerous records in our longevity swaps and reinsurance directory.
After the transaction is completed, funds under the management of Blackstone, GIC and MassMutual all acquiring some of Goldman Sachs shares, such that GIC and Blackstone will hold equal largest stakes in Rothesay Life and MassMutual will increase its existing stake substantially.
Goldman Sachs said that it will retain a close relationship with the insurer that it founded in 2007, although will no longer hold any interest in Rothesay Life.
Since the investment in December 2013, Rothesay Life has increased its assets from £7.5 billion at year-end 2013 to £23.7 billion at year-end 2016, thanks to the support of the shareholders and a healthy pipeline of pension risk transfer, reinsurance and acquisitions.
Addy Loudiadis, CEO of Rothesay Life, commented; “Rothesay Life is extremely grateful to Goldman Sachs for its support since it founded the business in 2007. We are also grateful to our other shareholders for their increased investment in the business. We are delighted that these shareholders are supporting the company’s growth and development. We look forward with confidence to taking advantage of the considerable growth opportunities we see in the sector.”
Qasim Abbas, Senior Managing Director at Blackstone Tactical Opportunities, said; “We are delighted to increase our investment in Rothesay Life. It is an outstanding business and we look forward to supporting its further growth.”
Choo Yong Cheen, Chief Investment Officer of Private Equity at GIC, also said “Rothesay Life is a good example of GIC’s investment objectives as a long-term investor. Rothesay Life offers an important service, has a differentiated strategy and strong growth prospects with the increasing demand for annuity risk transfer solutions. We are delighted to have the opportunity to increase our shareholding and continue to support the management team alongside Blackstone and MassMutual.”
Tim Corbett, MassMutual Chief Investment Officer, commented; “There is a tremendous market opportunity for de-risking solutions in the U.K., and Rothesay Life, with its proven track record of success, is well-positioned to capitalise on that demand. This acquisition underscores the tremendous relationship we enjoy with Rothesay Life’s talented leadership team, and are very much looking forward to this next chapter of our partnership.”
Dermot McDonogh, Chief Operating Officer for Goldman Sachs EMEA, stated; “The sale of our remaining stake in Rothesay Life concludes our ten year investment, from founding to supporting the growth of this market leading company. We wish the company, the management team and the shareholders continued success and we look forward to maintaining a close relationship in the future.”
The deal positions Rothesay Life with three strong key backers, which will help it achieve further growth, while for Goldman Sachs the exit will be both profitable, beneficial from its risk capital requirements and exposure to re/insurance business and leave a relationship it can leverage in years to come.
The transaction is expected to close in Q4 2017.