Resolution cash raising £3.6m cheaper than expected

Clive Cowdery’s buy out vehicle Resolution has said that its cash raising was less painful than expected, costing the company £10.4 million compared to a projected £14 million but it remained tight lipped about its first acquisition.

The company raised £660 million ahead of its listing on the stock exchange on 10 December last year and intends to use the funds to acquire assets in the UK life assurance and asset management sectors.

‘The company is already very well known by the shareholders so the fund raising process was very straight forward,’ a company spokesman said.

The company made a £0.7 million loss for the period owing to initial operating expenses, but it said returns on cash investments reduced this to £0.2 million.

While the company would not comment on its first target, possible acquisitions include Friends Provident and Clerical Medical.

‘We continue to believe that market conditions are good for RSL, to the extent that forced sellers will sell them life and asset management businesses at cheap valuations, driving embedded value accretion,’ said James Pearce, head of European insurance research at Cazenove. ‘In the meantime the group has no solvency or asset risk.’

Shares in Resolution were flat in early morning trading at 105.5p