With ProfitsMar 1 2018

Equitable Life hires Goldman for potential sale

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Equitable Life hires Goldman for potential sale

Mutual life insurer Equitable Life has hired Goldman Sachs to find a new home for the business.

The firm, which closed its book to new business following a scandal 18 years ago, is looking for "the best way to get capital back to investors", a spokesman said.

At the turn of the century Equitable found itself locked into paying out high interest rates promised at a time of high inflation - in the 1970s - at a time of low inflation and interest rates when it found it hard to fund those commitments.

The debacle led the UK government to pay back £1bn to eligible policyholders by the end of 2014.

The Equitable Life payment scheme closed to new claims on 31 December 2015.

Though getting smaller each year, the company still manages more than £6bn in assets for 300,000 policyholders, largely in with-profits funds.

Goldman was hired late last year as part of a review at the firm, Equitable Life said.

Chris Wiscarson, chief executive of the firm, said the company would investigate ways to make the 35 per cent distribution it currently makes to policyholders more secure, or to increase it.

He said: "We are determined to distribute greater amounts of capital to policyholders, and we are hopeful of being able to give them some good news in the spring."

carmen.reichman@ft.com