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Blackstone and GIC, and MassMutual to invest in Rothesay Life

22nd October 2013

Rothesay Life, one of the leading life insurers specialising in providing de-risking solutions to UK defined benefit pension funds, is pleased to announce that, subject to regulatory approval, funds managed or advised by Blackstone (as defined below) and GIC, and Massachusetts Mutual Life Insurance Company (“MassMutual”) will become shareholders:

  • Funds managed by Blackstone and GIC will each acquire a 28.5% equity stake and MassMutual a 7% equity stake in Rothesay Life.
  • Goldman Sachs will remain the largest shareholder with a 36% stake.
  • Rothesay Life reports that it has continued to write new business throughout 2013 with nearly £1.4bn written in the year to-date.

Following extensive due diligence by the investors on Rothesay Life’s business model, these investments represent a recognition of the success of that model, following six years of strong growth.

Rothesay Life’s 2013 new business transactions have included pensioner buy-ins with Philips (£484m), Cobham (£280m) and Smith & Nephew (£190m) and a buy-out with InterContinental Hotels (£440m). At this time of strong demand for insurance from pension funds, Rothesay Life and Goldman Sachs have brought new providers of capital to the UK pensions de-risking market.

Having been established as a wholly-owned subsidiary of Goldman Sachs, Rothesay Life now operates as a standalone business with over 60 full time professionals.

Completion of these investments is subject to regulatory and antitrust approvals, including approval from the Prudential Regulation Authority (PRA).

Addy Loudiadis, CEO of Rothesay Life, said: “We are delighted that three substantial investors have chosen Rothesay Life as their vehicle for investing in the UK pensions derisking market. Since establishing the business in 2007, we have built Rothesay Life steadily with a focus on pricing discipline and risk management. With over £12bn of accumulated liabilities, we have now successfully diversified our shareholder base as the next step in our journey.” She continued: “Throughout this year, we have added substantial new business to our books and continue to work on a strong pipeline of buy-in and buy-out opportunities.”

Michael Sherwood, Vice Chairman of The Goldman Sachs Group, Inc., said: “Rothesay Life's success has now brought it to a size at which it is more capital-efficient for Goldman Sachs to share its ownership with other investors. As a market leader in a dynamic industry, Rothesay Life can continue its growth as a standalone business with the benefit of diversified ownership. We are pleased to remain the largest shareholder alongside three world class investors.”

Chad Pike, Vice Chairman, Europe and head of Tactical Opportunities Europe at Blackstone, said: “We have been following developments in the UK pension insurance market for some time and anticipate significant growth potential as interest rates continue to rise. With its leading franchise and experienced team, we believe Rothesay Life is wellplaced to continue its success in providing this important solution to pension schemes.”

Tay Lim Hock, President of GIC Special Investments, said: “This investment underscores our confidence in Rothesay Life’s management team and business model. We also believe in the long-term potential of the expanding market for pension insurance buyouts and buy-ins."

M. Timothy Corbett, Executive Vice President and Chief Investment Officer at MassMutual, said: “As part of MassMutual’s investment strategy, we seek to generate competitive long-term results for our policyowners. Demand for risk management from UK defined benefit pension schemes offers significant growth opportunities, and our ongoing investment in Rothesay Life supports our view that the company is well-positioned to capitalise on this opportunity.”

ENDS

Contact:
Temple Bar Advisory Limited +44 (0)20 7002 1080 or +44 (0)7795 425580
Alex Child-Villiers, Tom Allison or William Barker

About Rothesay Life

Rothesay Life was established in 2007 and has become one of the leading providers of regulated insurance solutions in the UK market for pensions de-risking, with over £12 billion of insurance contracts. In 2012, Rothesay Life wrote over £1 billion of new bulk annuity business and has now already written nearly £1.4 billion in 2013. This strong growth has been achieved through the steady accumulation of pension scheme clients and the acquisition of Paternoster in 2011.

Existing Rothesay Life clients include the pension schemes and members associated with such names as RSA, British Airways, P&O, Rank, Uniq, General Motors, the MNOPF (Merchant Navy Officers Pension Fund), InterContinental Hotels and Philips.

Rothesay Life is a secure long term provider of pensions, focused on:

  • a flexible and committed approach to execution;
  • ongoing risk management to maintain balance sheet strength; and
  • robust operational processes.

Rothesay Life is currently owned by The Goldman Sachs Group. Inc., but is separately capitalised under UK insurance regulation. Rothesay Life is authorised and regulated by the UK Prudential Regulatory Authority.

www.rothesaylife.co.uk

About Goldman Sachs

The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centres around the world.

About Blackstone

The Blackstone Group L.P. (together with its affiliates, “Blackstone”) is one of the world’s leading investment and advisory firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, the companies we advise and the broader global economy. We do this through the commitment of our extraordinary people and flexible capital. Our alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions, credit-focused funds and closed-end funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com. Follow us on Twitter @Blackstone.

About GIC

GIC is among the world’s largest fund management companies. It was established in 1981 to manage Singapore’s foreign reserves. GIC strives to achieve good long-term returns on assets under its management, so as to preserve and enhance Singapore’s reserves. Since its inception, GIC has grown from managing a few billion dollars to well above US$100 billion today. GIC’s investment framework capitalises on its strengths which include the ability to take a long-term investment perspective, a global presence, capabilities to invest in crossasset opportunities, and a skilled and experienced team. It has investments across 40 countries and in assets such as equities, fixed income, real estate and private equity. GIC is headquartered in Singapore with a network of offices in nine cities worldwide.

About MassMutual

Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyholders consistently since the 1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term.

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, Member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.

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