Friends abandons sale of F&C Management stake

by Gill Montia

Story link: Friends abandons sale of F&C Management stake

Friends Provident has shelved plans to sell its 52% stake in F&C Management, the global asset manager that focuses on institutional and retail investors.

The sale was originally mooted back in December of 2007 after Friends’ failed bid for closed life consolidator, Resolution, left the future of the company in doubt.

However, no buyer has emerged for its majority share in F&C, which posted a £67.2 million pre-tax loss in 2008, compared with a profit of £25.9 million a year earlier.

The result reflects an impairment charge of £48.3 million on the value of management contracts from F&C’s acquisitions of Isis Asset Management and RSAI Investments.

Friends now says it will be renegotiating its long-term contract with F&C and that its stake in the fund manager will be distributed to shareholders this year.

The life assurer auctioned two other businesses last year but was unsuccessful in securing a sale of either its Lombard business, which specialises in tax-efficient investment for high net worth individuals, or Pantheon, an independent financial adviser firm.

The sale of F&C was always seen as a somewhat drastic measure because control of the fund manager differentiates Friends Provident from its competitors.