Tweet
Resolution, the buyout vehicle created by philanthropist and insurance expert Clive Cowdery, is braving the turmoil in the world's financial markets and planning a £1bn flotation next month.
Cowdery and his four colleagues in the Resolution team, which includes former Financial Services Authority boss John Tiner, intend to put £20m of their own money into the business in the hope of making a massive return if it succeeds.
Resolution, which is in its second incarnation, plans to buy-up troubled financial services companies, initially focusing on the life assurance and asset management sectors in the UK.
"We are very excited about the opportunities that we see in the financial services industry," said Tiner. "We believe this is a good time to re-enter the market."
Resolution expects to have to raise further funds from shareholders in order to go on its shopping spree and will hold businesses for between two and four years before selling them on and sharing any profits with its shareholders.
There is no shortage of potential targets in the bombed-out financial sector for so-called vulture funds such as Resolution and already rumours are swirling about Cowdery's plans.
There has been talk that the company is set to swoop on the asset management arm of HBOS or buy out struggling fund manager New Star Asset Management, which is rumoured to be planning an emergency fundraising despite recently renegotiating its banking covenants. But Tiner refused to comment today.
Cowdery, who was rebuffed in his attempts to rescue Bradford & Bingley earlier in the year, made a £145m personal fortune from the first Resolution vehicle he set up in 2003 to buy up life insurance companies. It expanded rapidly and reversed into stockmarket-listed Britannic before eventually being taken over by Pearl in May, following an acrimonious bid battle. Cowdery kept the right to use the name.
The new Resolution is registered in Guernsey for tax reasons and has a board of five independent non-executive directors lead by chairman Mike Biggs, who worked on the first incarnation of the company.
Cowdery, Tiner and their three colleagues, meanwhile, who will find targets for Resolution to acquire and then work on their turnaround, work for Resolution Operations rather than being direct employees of the listed company. They will be paid an annual fee for their work but the majority of their remuneration will come in the form of a share of the profits from any successful turnaround. That could run into the tens if not hundreds of millions of pounds if Resolution 2 is as successful as the first business.
"Essentially our incentivisation will be through a share of the profits that are distributed to shareholders when we complete our restructuring projects," explained Tiner.
guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds
More...
