Life funds deal moves closer

INVESTMENT firm HHG has said it expects to complete the £1bn sale of its with-profits funds this week, following approval from City regulators. The funds include Pearl, London Life and NPI.

The Anglo-Australian firm, formed in 2003 when Australian fund manager AMP exited the UK, expects to sell its closed life and pension books to entrpreneur Hugh Osmond tomorrow.

HHG, which also owns the Henderson fund management brand, said the Financial Services Authority had given its approval for the transaction yesterday.However, the FSA said the minimum amount of capital that should be held in the funds was set higher than the standard regulatory figure.

The company, which is planning to return some £875m of the proceeds from the deal to its shareholders under a share buyback programme, added that investors should receive the cash by 6 May.

HHG agreed in December to sell the closed funds of its life insurance subsidiaries to Life Company Investor Group (LCIG), a life fund buyout vehicle set up by Osmond, former owner of the PizzaExpress restaurant chain and founder of pubs group Punch Taverns.

LCIG saw off a competing bid from Resolution Life Group, a rival life fund buyout vehicle whose backers include asset managers F&C. Resolution, which last year bought the closed life books of struggling insurance giant Royal & Sun Alliance, also announced yesterday that it had completed the acquisition of Swiss Life UK.

The company said it would integrate the life firm with its existing operations to form a new business, Phoenix Life Group.