GIC, MassMutual to increase stake in Rothesay Life

Singapore's sovereign wealth fund and MassMutual will each become 49 per cent shareholders

GIC and Massachusetts Mutual Life Insurance Company (MassMutual) will increase their shareholding in UK specialist annuity provider Rothesay Life, by acquiring Blackstone's 36 per cent interest for an undisclosed sum.

Singapore's sovereign wealth fund and US-based mutual life insurer MassMutual have reached an agreement with Blackstone's Tactical Opportunities business for the deal, which values Rothesay at £5.75 billion.

GIC and MassMutual will each become equal 49 per cent shareholders, they said on Wednesday.

Blackstone, GIC and MassMutual first purchased their shares in the UK pension insurer in 2013. According to Rothesay's 2016 annual report, GIC and Blackstone each held 26.5 per cent at the time while MassMutual owned 6.5 per cent. In 2017, the trio then bought out Goldman Sachs' 32.7 per cent stake in Rothesay, such that GIC and Blackstone held equal - and the biggest - stakes while MassMutual upped its interest "substantially".

Rothesay, which insures defined benefit - also known as final salary - pension schemes, said on Wednesday that it has grown its assets under management to £56 billion, from £7.5 billion, since the trio's initial investment.

Rothesay will continue to provide a full range of solutions on a large scale and take full advantage of strategic prospects with a value and risk-driven approach to underwriting, said chief executive Addy Loudiadis.

MassMutual and GIC "substantially" increasing their investment provides Rothesay's business with "exceptional long-term support from two of the world's leading institutional investors", Ms Loudiadis added.

GIC chief investment officer Choo Yong Cheen said the fund has confidence in Rothesay's long-term prospects, "given its highly capable management team and strong risk management practices". Also, GIC will work closely with MassMutual to add value to Rothesay as the latter strengthens its leading position in pension de-risking solutions.

Completion of the transaction is subject to regulatory approvals.

Rothesay underwrote a record £16.3 billion of new business last year, and saw "continued strong momentum" in the first half of this year.