* Chief Executive Steven Groves' stake worth 48 mln pounds
* Cinven made return of more than seven times on investment
* Blackrock, GIC among new shareholders
By Kylie MacLellan
LONDON, June 7 Private equity-backed life
insurer Partnership Assurance Group made a robust London
stock market debut on Friday, in the strongest year for British
company listings on their home patch since the financial crisis.
British firms, including insurer esure and estate
agent Countrywide, have raised a total of $3.4 billion
from initial public offerings (IPOs) on the London Stock
Exchange's main market so far this year, the highest
year-to-date volume since 2007, Thomson Reuters data showed.
Improving stock markets have encouraged companies to test
the water for listings again after many held off following the
2008 financial crisis, with a backlog of private-equity-owned
businesses helping boost the number of home-grown London IPOs.
Total IPO volumes on London's main market, including
overseas companies, hit a post-crisis peak of $13.9 billion in
Partnership said on Friday it had sold its shares at 385
pence each, in the upper half of its 325-400 pence range and
valuing the company at 1.54 billion pounds ($2.4 billion).
The stock enjoyed a strong debut, opening 17 percent above
the listing price at 450.5 pence. By 1152 GMT it was trading at
455 pence, having earlier hit a high of 480 pence.
Partnership sells annuities which pay out more to customers
with medical conditions such as diabetes and heart disease who
might otherwise find it hard to get cover, as well as insurance
to fund long-term residential care.
It claims a 26 percent share of the 4.5 billion pound
non-standard annuities market in Britain and last month reported
an operating profit of 112 million pounds in 2012, a 42 percent
increase on the year.
The listing price values Partnership, which expects to be
eligible to join the FTSE250 index, at around 11.7 times
forecast 2014 earnings. That compares with 11.5 times and 13
times respectively for competitors Legal & General and
Shore capital analyst Eamonn Flanagan said Partnership's use
of reinsurance companies to take on the risk that someone lives
longer than it expects, reduces the amount of capital it needs
to hold, boosting its return on equity.
CINVEN RETAINS MAJORITY
The share sale raised a total of 485 million pounds for the
company and its selling shareholders, including 125 million from
new shares which Partnership said it would use to pay down debt.
"I now look forward to executing the next phase of our
strategy to expand our reach and market share further," Chief
Executive Steve Groves said in a statement.
At the listing price, Groves' own stake in the company was
worth 48 million pounds. He will bank around 12 million pounds
from selling a quarter of his holding in the IPO.
Majority owner Cinven, which acquired Partnership
for 158 million pounds in 2008, said it had made a return of
more than seven times its original investment.
The size of the sale could be increased by up to 15 percent
if there is strong demand. Assuming this over-allotment option
is exercised, Cinven will retain 52 percent of the company.
Partnership's sale was 10 times oversubscribed at the
listing price, two people familiar with the matter said, with 75
percent of orders coming from UK and US mutual funds. Earlier
this week it brought forward the close of the offering by
several days, indicating strong demand.
Offer documents showed Blackrock, the world's
largest fund manager, bought a 3.4 percent stake, while
Singapore's sovereign wealth fund the Government of Singapore
Investment Corporation (GIC) took 3.1 percent.
Bank of America Merrill Lynch and Morgan Stanley
ran the share offer.