HBOS to float property arm of Insight unit for £270m

The financial services giant HBOS unveiled plans yesterday to float the property arm of its asset management division, and said it hoped to raise about £100m to expand the business.

The new company, to be called Invista Real Estate Investment Management, will be listed on AIM in three weeks, with an estimated market value of £270m.

Invista, currently a subsidiary of HBOS's fund management arm Insight Investment, has assets under management of about £8bn, having almost doubled in size over the past three years.

HBOS will retain a stake of about 55 per cent in the floated company, which will continue to manage property assets for the bank's life assurance business, which run under the Halifax Life and Clerical Medical brands.

The City heavyweight Alastair Ross Goobey, a former chief executive of Hermes Pensions Management, has been signed up as Invista's chairman, while Duncan Owen, an Insight insider, will be chief executive. Since leaving Hermes in 2001 after eight years at the helm, Mr Ross Goobey has been an adviser for Morgan Stanley.

Mr Owen said Invista intended to use the money raised to accelerate the expansion of its continental European business.

Marketing of the float will begin immediately. However, Mr Owen said several of the company's key clients had already expressed an interest in taking a stake.

"With the first stage of our rapid development well established, we are now looking to deliver further opportunities for our clients," he said.

"The strong platform for growth provided by a listing and the raising of external capital for seeding new funds and co-investment will assist the continued development of new initiatives for our clients. This will ideally position us to take advantage of the attractive opportunities we see in the UK and continental European property markets."

Douglas Ferrans, the chief executive of Insight, said floating the company was the "optimal way to continue to deliver the investment results and business growth required".

HBOS shares fell a little less than 1 per cent yesterday to close at 1,003p.