UK insurer Standard Life has re-structured its fund of funds arm into a limited liability partnership called SL Capital Partners, 40 percent of which will be owned by nine of the division’s management team.
The team manages several funds of funds and a London Stock Exchange-listed European vehicle, in which Standard Life owns half the shares.
“This is a win-win-win situation which protects the interests of clients going forward, as they are closely aligned to that of management,” Standard Life’s spokesman said.
The assets and liabilities of Standard Life will be transferred to the vehicle. The insurer will keep 100 percent of the business’s value and 60 percent of the economic and voting rights.
The division’s three executive directors, David Currie, Peter McKellar and Stewart Hay will receive the equity alongside six of their colleagues. The business’ other 28 employees will be employed by the partnership.
The move comes after speculation last year that the arm would spin out from Standard Life. The then chief executive Jonny Maxwell, who had built the division up over seventeen years, subsequently resigned. He recently re-surfaced at Allianz.
Standard Life’s spokesman said there had been disagreements related to the future direction and ownership of the business leading to Maxwell’s resignation. The spokesman said the current model had been negotiated by the present board.
The executive members have an option on 13 percent of the economic and voting rights at fair value, allowing them to retain control of the company in the event of any bid from a third party.
In the year ended 31 December 2006 the business had revenues of £22 million ($44 million, €32 million) and £6.6 million profit, with assets under management of €3.4 billion.