Irish Life suspends withdrawals from €120m UK fund after Brexit

Irish Life has suspended withdrawals from a €120 million UK property fund that it manages following "sustained outflows" in the weeks after the Brexit result.

On July 12th, the company introduced a six-month notice period for investors wishing to cash in, or switch out from, its UK Property Fund.

The company told The Irish Times yesterday that while the fund was in a positive cash position, the "decision to introduce the delay period was driven by the need to treat all investors in the fund fairly".

It is not clear how much was withdrawn from the fund before Irish Life introduced the suspension. This move mirrors decisions by other property fund managers in the UK following the country's shock decision on June 24th to quit the European Union.

Details of the suspension were included in the second quarter accounts published by Irish Life’s Canadian parent company, Great-West Lifeco.

The company also revealed that it expects to incur costs of €16 million from the merger of the recently-acquired Aviva Health business with GloHealth, where it has taken full ownership, into a new entity called Irish Life Health.

Great-West Lifeco expects the integration process to yield annual savings of €16 million in operating efficiencies from the merger of the businesses. This won’t involved any redundancies as the 160 staff of the two companies have been told that there will be roles for them in either the newly-established health insurer or the wider Irish Life group.

"Our main focus during the quarter was on progressing the transactions to acquire Aviva Health and assume control of GloHealth," Irish Life chief executive David Harney said.

“Earlier this week, we announced the establishment of Irish Life Health and we are now in the process of integrating the two companies under the new brand. This is a very significant development for Irish Life Group and a good fit with our existing life and pensions business as we expand our financial services portfolio in the Irish market.”

Profits at Irish Life declined by €9 million in the second quarter, with the company contributing €36 million (CAD$52 million) to its parent company Great-West Lifeco.

That compared with €45 million (CAD$60 million) a year earlier. This reduction was the result of one-off property and bond disposals that were recorded in the second quarter of last year.

The company said a big contributor to its performance was Irish Life Investment Managers (ILIM), which grew assets under management by 11 per cent to just over €60 billion. International clients in Europe, the US and Canada now account for more than a third of those assets.

ILIM secured a mandate in the second quarter from the Ireland Strategic Investment Fund to manage global multi-asset mandates, which comprised €600 million of assets at the end of June.

Great-West Lifeco bought Irish Life from the State for €1.3 billion in July 2013.