AKG has reacted favourably to the recent management-led buyout of RL360°.

In November last year, the Royal London Group (RLG) entered into an agreement with funds advised by independent private equity firm Vitruvian Partners to support a management-led buyout of Royal London 360° for an undisclosed sum. As a result, the company was rebranded RL360°.

In a note issued following the ownership change, AKG referred to RL360° as “a financially strong standalone operation with very strong operational characteristics and positive development potential”.

AKG’s note also made reference to the fact that notable in the change in RL360°’s ownership has been the retention of existing senior management, led by Chief Executive David Kneeshaw, all of whom have significant experience and time within the operation. Indeed the final buy-in of the senior management is an important element of the new ownership persona.

The sale saw RL360° further strengthened through support from the global reinsurance group Munich Re, as well as an element of long term financing from RLG, and in addition to capital from Vitruvian. AKG noted that the Munich Re arrangement provided “certainty that new business can be supported for a time horizon of several years”. It also pointed out that such a deal demonstrated MunichRe’s confidence in and commitment to RL360°.

In its note, AKG said: “Operationally the change is positive with the existing infrastructure and organisation maintained together with the close alignment of ownership to business objective and culture.”

“The financing composition of the deal is interesting given the investment of all the senior management and the retained consideration of RLG and is innovative in terms of the arrangement made with “Munich Re to provide new business support via a quota share arrangement”

It continued: “Financial strength remains good and the presence of the quota share agreement with Munich Re supports liquidity and should mitigate any question over the ability of RL360° to support new business at or even excess of plan.”

In addition, AKG note also that there exists access to additional capital to enable RL360° to seek additional acquisitions and development opportunities.

AKG Actuaries and Consultants Ltd specialise in the provision of ratings, information and market assistance to the financial services industry. The company’s reports are designed to provide advisers the information they need to assess the relative strengths of offshore long term insurers.