Windfalls on way as Partnership Assurance targets £1bn float

A business that specialises in giving better pensions to people who are ill is set to join the stock market, a sign of good health for the London equity market at least.

Partnership Assurance Group, the private-equity backed insurer, is aiming for a float later this year that could value the business at more than £1bn.

Cinven, the majority owner with 80 per cent, plans to sell at least a 25 per cent stake at a price to be confirmed later in a deal that will mean windfalls of millions for managers – not least the chief executive, Steve Groves, who owns around 5 per cent of the stock.

Partnership has thrived from selling impaired annuities – annual incomes to those with medical conditions who come to cash in their pension upon retirement.

It made a profit of £112m in 2012, and is the second-biggest player in the non-standard annuity market after Just Retirement.

This year has seen the primary equity market revive after several years in the doldrums when companies that might have floated were scared away by turbulence in the stock market and investor reticence to take risks.

Bank of America Merrill Lynch and Morgan Stanley have been appointed as joint sponsors of the float with Keefe, Bruyette & Woods and Panmure Gordon acting as co-lead managers.

The Partnership float will follow that of the insurers Direct Line and esure in recent months.

The company began life in 1995 as a friendly society before demutualising in 2005.

Phoenix Equity Partners then sold the business to Cinven for £160m in 2008, meaning the current owners are on track to make a profit of more than £650m in just five years.

Last year Partnership moved to beef up its management team and present a strong face to the City when it hired Chris Gibson-Smith, the chairman of the London Stock Exchange, as its chairman. He replaced Ian Owen, who had held the position since 2005.