Clive Cowdery has ridden out equity market turmoil by raising £600m to prepare his Resolution acquisition vehicle for an assault on the UK financial industry.
Resolution announced yesterday it had placed 600 million shares at £1 each with investors in an initial public offering. The capital raising was at the low end of the £500m-£1bn indicated range but was deemed a success in markets rocked by financial crisis. Citi, one of the underwriters of the offering, has the option to buy a further 60 million shares at the same price.
Mr Cowdery announced his planned IPO in early September, just days before Lehman Brothers' bankruptcy. Torrid market conditions have forced many companies to shelve plans to raise money in equity markets and Resolution's IPO is London's biggest of the second half. John Tiner, chief executive of Resolution, said: "In these market conditions, this is a fantastic result for us." He added that the total raised was trimmed back from £700m so that certain investors could stay within their investment mandates.
Mr Cowdery has revived Resolution after selling his closed life fund manager, which bore the same name, earlier this year, pocketing about £150m for himself. He has assembled many of his original long institutional and hedge fund backers for a new fund that will buy up life insurance and asset management businesses to run them more profitably.
Mr Tiner said there was a big overlap between Resolution's investors, thought to include names such as Legal & General and Standard Life, and ownership of companies in the life insurance and fund management sectors. Resolution intends to use the clout of its investors to pressurise company managements to sell businesses to Resolution so that they can be run more efficiently or combined for economies of scale.
Resolution aims to raise an additional £3-5bn next year from shareholders to spend on acquisitions. Mr Tiner said the company would eventually look at UK banking and consumer credit operations, as well as European businesses. But, he added, "it will be beyond 2009 before we do anything else in any other sector or country".