Liberty scores group-life coup
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Financial Services Editor
INVESTEC is to sell the bulk of the employee-benefits business it inherited when it bought Fedsure Life to Liberty Group. Liberty says the deal will add three years' worth of new business to its growing employee-benefits operation.
Earlier this year Liberty said that it was eyeing a small local acquisition to boost critical mass in its employee benefits business, which it had been expanding in the past three years.
Liberty executive director Mike Jackson said the Investec deal enabled the group to grow the number of its funds 30%-40%, giving it three years' growth in one fell swoop. The group's employee benefits division, which focuses on small and medium enterprise pension funds with an average of 35 members, has been gaining 1000 new funds a year, and has assets of about R9bn. Liberty has bought only the fully administered part of the old Fedsure book, taking over 250 staff and R3,7bn of assets from Investec.
The deal, priced at embedded value, will be in stages, to take account of regulatory requirements, with Liberty first reinsuring the book before taking it over.
Investec employee-benefits head Ciaran Whelan said the group had sold the administration-intensive part of the business but kept the risk underwriting business . With the retirement fund industry becoming more complex, Investec concluded it had to invest heavily in the employee benefits business or do a transaction on reasonable terms.
Apr 16 2003 06:50:01:000AM Hilary Joffe Business Day 1st Edition
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