Warburg Pincus-led group invests in new annuities business

New York-based private equity firm Warburg Pincus, JP Morgan and the Royal Bank of Scotland have put an undisclosed amount into a new business focusing on UK annuities.

Warburg Pincus, JP Morgan and the Royal Bank of Scotland have provided an undisclosed sum to launch Synesis Life, a new UK provider of bespoke solutions to the pension and annuity liabilities marketplace.

Peter Wilson, a manging director at Warburg Pincus, declined to comment in an interview with PEO on the size of the investment or the exact size of the stake the three firms will hold in the new entity.

“What I can say is that we and our co-leads Royal Bank of Scotland and JP Morgan have taken substantial stakes as shareholders of the new business, which plans to acquire £7 billion to £10 billion (€10.2 billion; $13 billion to €14.5 billon; $18.5 billion) of liabilities over the medium term,” said Wilson.

Wilson said that Warburg Pincus invested from its ninth fund, which closed on $8 billion (€6.2 billion) last August. The vehicle is currently around 25 percent invested, said Wilson.

Synesis has been set up by former Prudential execs Isabel Hudson, Mark Duffy and Jay Shah. David Newbigging, former chairman of Friends Provident, has been appointed the company’s chairman.

The new business intends to establish itself as a leading acquirer of medium to large annuity portfolios from UK insurance companies and pension funds, focusing initially on insurance annuities where it believes the largest opportunities for growth lies. While initially targeting £7 billion to £10 billion of annuities over the medium term, the business said that its shareholder base has the resources to support “significant growth if justified by the performance of the business”.