The deal values 100% of UK specialist annuity provider Rothesay Life at £5.75bn

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Blackstone to sell its 36% stake in Rothesay Life to GIC and MassMutual. (Credit: Tumisu from Pixabay)

GIC and Massachusetts Mutual Life Insurance (MassMutual) will acquire Blackstone’s 36% stake in UK specialist annuity provider Rothesay Life for £2.1bn.

The three parties have been existing shareholders in the UK insurer since 2013.

The stake acquisition agreement has been reached by Singapore’s sovereign wealth fund GIC and MassMutual with funds managed or advised by Blackstone’s Tactical Opportunities business.

The transaction values 100% of Rothesay Life at £5.75bn.

As per the terms of the deal, GIC and MassMutual will become equal shareholders in Rothesay Life with each holding a stake of 49%.

Rothesay Life covers the pension needs of over 800,000 individuals

Rothesay Life, which was founded in 2007, provides regulated insurance solutions in the British market for pensions de-risking. The company has £56bn in assets under management and is claimed to insure the pensions of more than 800,000 individuals.

GIC private equity chief investment officer Yong Cheen Choo said: “We have confidence in Rothesay’s long-term prospects given its highly capable management team and strong risk management practices.

“We look forward to working closely with MassMutual to add value to Rothesay, as the company continues to strengthen its leading position in pension de-risking solutions.”

Prior to the entry of Blackstone, GIC, and MassMutual, the UK insurer had £7.5bn assets under management.

Last year, the specialist annuity provider had £16.3bn of new business underwritten.

Earlier this month, the pension insurer wrapped up a £610m buy-in with the Marathon Service (G.B.) Limited Pension and Life Assurance Scheme.

Blackstone senior managing director Qasim Abbas said: “The transformational growth of the business since our initial investment (in 2013) has been outstanding.

“Rothesay is now recognised as a market leader in de-risking solutions having executed over £16bn of new business in 2019, the largest ever total for a UK bulk annuity insurer, as well as the successful expansion into attractive new asset classes.”

The closing of the deal will be subject to regulatory approvals.