Phoenix boss Clive Bannister predicts a new lease of life for Zombie fundsComments Off on Phoenix boss Clive Bannister predicts a new lease of life for Zombie funds
Life will return to the takeover of so-called Zombie funds — closed life funds — according to the boss of Phoenix, the biggest player in the market.
Clive Bannister, chief executive of Phoenix, said: “The tectonic plates of the industry will start moving once again in 2016 and a number of vendors who have businesses which are currently open will close them to new business.
We’ve been through a period of hiatus because of new regulations, notably Solvency II, which has made it very difficult to put a price on assets, but that should be resolved by the end of this year.”
Phoenix was recently given an investment grade rating by credit ratings agency Fitch which should enable it to move quickly when new closed life funds come up for sale.
In the meantime its existing business — with some 5.25 million policies — generated £110 million of cash in the first half, down from £332 million, and operating profits fell from £266 million to £135 million, reflecting lower investment returns.
Bannister said it was a strong performance particularly given all the changes taking place in the regulation of insuyrance companies.
The half-year dividend is unchanged at 36.7p.