Tags: Blackstone | Talks | Goldman | Rothesay

Blackstone Said in Talks to Buy Stake in Goldman's Rothesay Unit

Sunday, 18 Aug 2013 07:09 PM

Blackstone Group LP, the world’s largest private-equity firm, is in talks to buy a stake in Goldman Sachs Group Inc.’s European insurance business, according to a person with direct knowledge of the matter.

The price and size of the stake to be acquired by Blackstone’s Tactical Opportunities fund are being discussed, and a deal still may not be reached, said the person, who requested anonymity because the negotiations are private. The companies were considering the sale of a minority stake, the Financial Times reported Friday, citing people familiar with the matter.

Goldman Sachs, which said it probably will sell a majority of London-based Rothesay Life Ltd., is doing so in part because new rules require banks to hold more equity to absorb potential losses on assets, a person briefed on the discussions said earlier this month. The business, run by Goldman Sachs partner Addy Loudiadis, 50, insures more than 10 billion pounds ($15.6 billion) of pension liabilities for companies including IAG SA’s British Airways.

Christine Anderson, a spokeswoman for New York-based Blackstone, and Michael DuVally at Goldman Sachs declined to comment on the potential deal.

The Tactical Opportunities fund, which oversaw $2.7 billion as of April, invests across Blackstone’s four main strategies: private equity, real estate, credit and hedge funds. It’s led by David Blitzer, 43, a senior managing director who started the firm’s European private-equity business in 2002.

Basel Rules

Rothesay, which Goldman Sachs set up in 2007, had $9.66 billion of assets at the end of the second quarter, an Aug. 8 filing shows. The unit had a pretax operating profit of 266 million pounds in 2012, according to its website.

Goldman Sachs’s Tier 1 common equity was equal to 9.3 percent of the bank’s risk-weighted assets at the end of June under new rules from the Basel Committee on Banking Supervision known as Basel III, according to the filing. The New York-based bank has said it wants to maintain a ratio of about 9.5 percent, or 1 percentage point higher than regulators will require.

The firm’s Tier 1 common equity was reduced by $9.87 billion because of investments in nonconsolidated financial institutions, according to the filing. That brought its Basel III figure to $55.8 billion, compared with $61.9 billion under current rules.

Insurance Insider reported earlier that Goldman Sachs and Blackstone were discussing a deal.

© Copyright 2015 Bloomberg News. All rights reserved.

1Like our page

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved