Cinven Ltd. has announced that it has purchased the life and pension unit of U.K. Guardian from the Dutch insurance company which owns Scottish Equitable, Aegon NV, for $449 million, in the effort to reduce its expenses within the United Kingdom.
According to Aegon, which is based in the Hague, by the end of June 2011, the U.K. Guardian unit had recorded a value of approximately $445 million. Its unit for asset management will still be responsible for Guardian’s approximately $12 billion in assets on Cinven’s behalf.
By 2015, Aegon’s goal is to increase its capital return within the United Kingdom up to 10 percent by reducing expenses and moving capital to business with larger growth. Since June 2010, when its intentions were first announced, Aegon has stepped away from the bulk annuities market, shutting down its business for employee benefits, and having sold its U.K. business for third party pensions administration.
Jan Nooitgedagt, the chief financial officer for Aegon, released a statement that said that this decision was in line with the company’s actions over the last three years, for eliminating those businesses that it considered to be non-core, and that the insurer has decided that the management of Guardian’s closed business, which was no longer aligned with their strategic objectives. That said, he added that “We remain committed to the United Kingdom.”
In a different statement, Cinven announced that its purchase provides it with a foot in the door to the United Kingdom market for closed life, as well as a solid platform from which they can build a strategy of consolidation within that area.
