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Towers Watson questions Goldman's ability to sell Rothesay stake

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  • Towers Watson questions Goldman's ability to sell Rothesay stake

UK – Goldman Sachs is hoping to sell its UK pension insurance business Rothesay Life, but consultancy Towers Watson has questioned whether the investment bank will be able to find a buyer.

The investment bank's intention to sell Rothesay came to light after it filed second-quarter regulatory statements with the US Securities and Exchange Commission.

A spokesman said: "The firm is likely to sell a majority stake in Rothesay Life during the next twelve months."

Talks of a sale come the same week as Legal & General finalised its acquisition of Lucida for nearly £150m (€174m), almost a year after the company ceased writing new business.

However, Ian Aley, senior consultant at Towers Watson, questioned whether the bank would be able to find an interested buyer for the company involved in a £680m buy-in with the Merchant Navy Officers Pension Fund late last year.

"After a period of consolidation," Aley said, referencing Rothesay's acquisition of Paternoster in 2011, "it is not certain whether Goldman Sachs will be able to find a trade buyer – though it is possible US or European insurers could be interested in entering the UK market".

He added: "The public offering route makes it harder for a monoline insurer to draw down capital as needed, so this would have to raise enough to provide a war chest to fund reserves against future business."

The senior consultant said Rothesay would continue to bid for new business, as it would have the support of Goldman Sachs to be able to "see these deals through".

"As we have seen with the transfer of Paternoster's bulk annuity book to Rothesay and Lucida's to L&G, procedures are in place to allow changes at provider level with no disruption to the pensions that have been insured," he said.

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