* 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 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
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
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