UK - Henderson Global Investors will be vulnerable to a hostile takeover bid once parent AMP completes its plans to withdraw from the UK insurance market, industry sources say.
The Australian insurance giant is effectively pulling out of the UK following heavy losses in its Pearl Assurance, NPI and London Life divisions.
AMP is splitting its fund management and financial services divisions into separate Aus-tralasian and UK companies, and will take a Aus$2.6bn (£1.02bn) writedown in the process.
One senior investment consultant predicted that once AMP has finished its restructuring programme, and the UK divisions become standalone businesses at the end of the year, HGI will be ripe for a takeover bid.
He said: “When you compare HGI’s position before and after the demerger, it must be more vulnerable than it was previously for a takeover.
“It is entirely possible that there will be corporate activity in the future, but our understanding is that it won’t happen until the end of the year.”
Another leading fund manager – who also declined to be named – said: “With the changes in the pension industry, such as asset allocation changes, FRS17 and others, there’s a premium to be paid for a bond house such as HGI.”
As part of AMP’s Aus$1.5bn (£590.5m) group restructuring programme, its UK-based business will be known as Henderson.
It will be led by current HGI managing director Roger Yates – who becomes chief executive officer – and AMP director Pat Kingsley who becomes chairman.
This week's edition of Professional Pensions is out now
MPs failed to place legislation into the Financial Guidance and Claims bill that would have made pension guidance default, which Just Group director Stephen Lowe said left a "bitter taste".
Aegon has called for the government to double the tax exemption on employer-arranged pension advice, up from £500 to £1,000.
Institutional investor confidence in Europe rose by 8.9 points in April with each region showing growing appetite for risk, according to State Street Global Exchange.