Legal & General (L&G) has sold off Sipp business Suffolk Life to Curtis Banks for £45 million.
L&G originally bought the specialist Sipp provider in a deal which valued it at £62 million in 2008 in a bid to move its pensions business into the mass affluent market.
However, more recently the life company has focused on lower cost, mass market offerings, a move which raised questions over the future of a high-end Sipp business such as Suffolk Life as well as the Cofunds platform.
In June 2015 New Model Adviser® revealed that Cofunds was up for sale and later reported that talks with Sipp provider AJ Bell had ended three months later with no deal reached.
L&G digital director Mike Bury, who was responsible for Cofunds and Suffolk Life, then left the business at the end of last year as part of a reorganisation.
Cofunds remains part of L&G, but Suffolk Life has now been sold to consolidator Curtis Banks in a £45 million deal.
L&G chief finance officer Mark Gregory said: ‘Suffolk Life is a great business, but it is not core to our focused strategy going forward. Teaming up with Curtis Banks will help it to realise its strong potential, by creating one of the UK’s largest Sipp providers.’
Chris Banks, executive chairman of Curtis Banks, said the move would mean the combined company would be the UK second-largest Sipp provider.
He added that Curtis Banks would retain Suffolk Life’s Ipswich headquarters and that there would be ‘exciting opportunities for Suffolk Life’s management and employees as part of the enlarged group’.
Banks buys big
Curtis Banks, which is listed on AIM, will fund the deal in part by raising £27 million from issuing new shares. It has also struck a deal with Santander to borrow up to £23 million.
Suffolk Life administers 26,500 Sipps accounting for assets of £8.7 billion. The combined firm will administer 65,000 Sipps with £18 billion of assets.
Suffolk Life had once itself been a consolidator, acquiring the Pointon York Sipp book in 2012, and then the Origen and Pearson Jones Sipp books in 2013.
In June last year the company formally announced the end of its acquisition spree with the departure of strategic partnership director Chris Jones.
Meanwhile, Curtis Banks has been actively consolidating the Sipp market following its floatation on AIM in May last year, a move which raised £7.5 million for the company.
In September last year Curtis Banks struck a deal to administer the Sipp book of life company Zurich , a deal which will earn it £3.25 million in the first two years.
Prior to that Curtis Banks bought the Sipp book of Friends Life in March 2015 in a deal worth £2.2 million.
Source: New Model Adviser