Permira's 'Death Bond' Firm To Join IPO Rush
The private equity group behind Just Retirement, one of Britain's biggest providers of so-called 'death bond' annuities, is preparing to float the company amid a revival in the market for public share sales.
I have learnt that Permira, the buyout group which owns stakes in New Look, the fashion retailer, and Birds Eye, the frozen food producer, has hired bankers to begin the process of securing a listing on the London Stock Exchange.
Sources close to Permira said that Deutsche Bank and Nomura had been appointed in recent days to oversee a review of Just Retirement's options, with the likeliest outcome seen as a stock market listing.
Permira will also consider an outright sale of Just Retirement, which it bought from the stock market for £230m in 2009.
Insiders said on Friday that the review was "at a very early stage, with no decisions taken". The review by Deutsche Bank and Nomura is unlikely to result in a decision for the best part of a year, one source said.
Its decision about which exit route to pursue will hinge at least in part upon the fate of Partnership Assurance, a rival to Just Retirement, which is in the advanced stages of readying a public listing.
Partnership, which is owned by Cinven, another private equity group, is expected to be worth as much as £1bn when it comes to the market.
Both Just Retirement and Partnership are specialist financial services companies which offer enhanced retirement annuities to customers whose life expectancy may have been limited by illness or disease. Just Retirement also offers equity release products enabling retirees to unlock money from their homes.
Such specialist companies have expanded aggressively in recent years, and last month Just Retirement announced record group quarterly sales of £491m, a year-on-year increase of more than 50%.
"Record results were recorded for enhanced annuity and fixed term annuity sales. These high sales volumes have resulted from increased total market activity by financial advisers to bring forward business ahead of the December cut off dates for gender and the retail distribution review. We expect volumes in the next quarter will be significantly lower than these exceptional market levels," Rodney Cook, Just Retirement chief executive, said.
Whichever route Permira opts to pursue, Just Retirement will be worth well in excess of the price it paid to take the company private four years ago.
A flotation would provide another litmus test of the relationship between private equity firms and institutional investors, which is slowly recovering after years of mistrust at the way buyout firms sold portfolio companies to the public markets during the last decade.
In addition to Cinven's ambition to float Partnership, Doughty Hanson, another private equity firm, has announced plans to list HellermannTyton, an industrial group.
The market for flotations is also being revived in a broader way, with companies such as esure, the motor insurer, and Royal Mail at various stages of preparation for a listing.
Permira declined to comment.