Resolution raises 600 mln stg in UK IPO, eyes deals
* Investor demand for IPO over 700 mln pounds
* CEO says confident of deals in 2009
* Targeting internal return rate in "mid-teens" percent
* Shares trade 3 percent above issue price
(Adds interview with CEO, comments, details)
By Myles Neligan and Daisy Ku
LONDON (Reuters) - UK buyout firm Resolution Ltd (RSL.L) said it had raised 600 million pounds ($880 million) in the fourth-largest London listing this year and was confident of making deals to restructure financial services in the UK.
Resolution could raise a further 60 million pounds from the sale of extra shares and aims to use the proceeds and a subsequent rights issue to acquire financial services companies, particularly UK life insurers or asset managers.
"There is a very high degree of commonality in our shareholder register with the shareholder register of the UK life insurance and asset management sectors," Chief Executive John Tiner, formerly head of Britain's Financial Services Authority, told Reuters in an interview.
"That alone gives us a real mandate from these blue chip investors to restructure the UK life insurance and asset management sectors," he said.
The investment vehicle, founded by entrepreneur Clive Cowdery, sold the shares at 100 pence each. Its management took 20 million pounds of shares, or about 3 percent of the company.
The company is modelled on Cowdery's previous venture, also called Resolution, which focused on buying and consolidating life insurance funds that had been closed to new business.
"We have received demand of over 700 million pounds, but we had to scale back to meet shareholders' preferences as to size of holdings," said Tiner.
The previous business, founded in 2003, was sold for almost 5 billion pounds last year to rival Pearl Group after a long takeover battle, yielding bumper returns for the investors who backed it.
Those investors, which included Legal & General Investment Management, Standard Life Investments, Prudential's M&G and Royal London Asset Management, are backing the new venture.
"(Cowdery) is going to be able to put companies together to get cost savings and efficiencies and he's had a very good track record of doing this previously," said Jane Coffey, head of equities for Royal London Asset Management.
She said she had taken a "toe-hold" in the firm to tap into distressed prices of financial companies.
"Once we know exactly what he's going to be buying then we can take a view on whether we want to be a bigger part of this," Coffey added.
Resolution, advised by Lazard, is looking for acquisition opportunities in a range of 3 to 5 billion pounds, which generate internal rates of return in the "mid-teens" percent, assuming no access to the debt market nor re-rating of the assets, according to Tiner.
It is unlikely that Resolution will close its first deal this year, but Tiner expects deals in 2009, which will be funded by a follow-on rights issue.
"In the last two to three weeks, we had told investors that this was a placing of pre-emption rights," he said, saying he hoped investors would follow on with more money.
By 1520 GMT Resolution shares were trading at 103 pence in conditional dealing, up 3 percent from their issue price.
Unconditional trading is due to start on Dec. 10.
The placement was arranged by Citi (C.N), HSBC (HSBA.L) (0005.HK) and Merrill Lynch MER.N.
No company has raised over $100 million in Britain since energy firm Cadogan Petroleum's (CADP.L) $299 million listing in June.
Including Resolution, 15 companies have listed on the main board of the London bourse so far this year for a combined $8.9 billion, down 78 percent from last year's $40.8 billion, Thomson Reuters data showed.
Shares of 13 of the newly listed firms now trade below their issuing prices, with some down as much as 86 percent.
(Additional reporting by James Molony, editing by Will Waterman)
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