UK arm to be 60% of IFG business after takeover, says chief

Tue, Jan 5, 2010, 00:00

THE CHIEF executive of Dublin-listed financial services company IFG has said the company’s British division will constitute 60 per cent of its overall business following the acquisition of pensions company James Hay Holdings. IFG’s British unit currently accounts for 40 per cent of its business.

Mark Bourke was speaking after the company’s extraordinary general meeting yesterday at which shareholders voted to approve the £35 million deal, which will see IFG’s existing British pension business, IPS Partnership, absorbed into James Hay, a company that specialises in self-invested personal pensions.

Mr Bourke said yesterday IFG will become the largest provider of self-invested personal pensions in Britain as a result of the deal. He also confirmed James Hay is to be adopted as the trading name for the enlarged business. and that the IPS name will be phased out.

On December 10th last, IFG announced it was to acquire James Hay Holdings from Santander Private Banking in a £35 million (€38.5 million) cash deal. IFG is financing the deal through a €50 million share placing.

It emerged that a group of private investors, led by British financier Edmund Truell, offered to invest up to £25 million in the company and subscribed to the placing through a company called Fiordland.

Mr Bourke said yesterday he believes the consortium, which has a 15 -17 per cent investment in the expanded IFG, will not take a further stake in the company. “This is a group of private investors, investing personal money rather than a fund,” he said.

Latest accounts for IFG show the company posted an increase of 23 per cent in pretax profits to €11.6 million in the six months to the end of June 2009 due to growth in its international unit, particularly its UK pension division. However, the company’s Irish division, particularly its mortgage broking business, has been hit by the economic downturn.

Mr Bourke said yesterday that, while the Irish business represents less than 5 per cent of the business, it is “essentially a non-producer in terms of profit”.

He said while IFG has three divisions – an international corporate services business, a British financial services and pensions unit, and a smaller Irish division – essentially IFG now comprises two divisions. These are its international corporate services division, which represents 40 per cent of the business, and its UK pensions business, which makes up 60 per cent.