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Multiple of cost

Guardian, a consolidator of closed life insurance books, was sold by Cinven in January 2016 generating proceeds for ICG Enterprise Trust of £7.3 million.

Key Stats

  • ICG Enterprise exit value: £7.3m
  • Uplift to carrying value: 20%
  • Underlying manager: Cinven
  • Date realised: January 2016
A consolidator of closed life insurance books

ICG Enterprise Trust (ICGT) invested in Guardian Financial Services through its commitment to the Fourth Cinven Fund in 2006. In 2011 ICGT increased its exposure to Guardian through a secondary purchase of a further interest in the Fund.

Cinven’s specialist financial services sector team spent three years developing an investment strategy for the closed life assurance sector. Closed life books enjoy highly visible and stable long term cash flows with attractive returns on equity. Cinven’s investment strategy focused on acquiring a life insurance book with a solid administration platform and creating a long term, strategic consolidator in the fragmented UK market.

Cinven acquired Guardian in November 2011. The company had been closed to new business for some 10 years but still managed approximately 327,000 policies and employed 165 people.

The acquisition of Guardian was the starting point for a closed life consolidation strategy in the UK. Over the period of Cinven’s ownership Guardian made three substantial acquisitions growing the business to approximately £20 billion of assets and 900,000 policies. Cinven created an industry leading management team and significantly improved both operations and customer service all of which helped generate strong financial performance.

In January 2016 Cinven sold Guardian to Admin Re for total consideration of £1.6 billion. The sale generated cash proceeds equivalent to 4.2 times the original investment and proceeds for ICGT of £7.3 million at an uplift of approximately 20% to the previous valuation.

Cinven’s financial services team has applied the learnings from the successful UK closed life insurance consolidation with Guardian to pursue a similar strategy in Germany through the acquisition of Heidelberger Leben in March 2014. ICG Enterprise holds an investment in Heidelberger Leben through its investment in the Fifth Cinven Fund.