Zombie fund Resolution comes to life as 'restructuring phase' is completed

By JAMES SALMON FOR THE DAILY MAIL

Updated: 21:03 EST, 18 March 2014

Resolution declared its 'restructuring phase' complete, after reducing costs by £160million over three years

Resolution has declared that its metamorphosis from a ‘zombie’ fund to a fully-fledged life insurer is complete.

The investment vehicle’s chief executive Andy Briggs said it had reached a ‘turning point’ and explained this was one of the reasons behind its decision to change its name to Friends Life Group.

This will be put to a vote at the AGM in May. Its co-founders, serial entrepreneur Clive Cowdery and former Financial Services Authority boss John Tiner, will step down from the board.

The announcement came as the firm, which launched in 2008 and is best known for buying Friends Provident and parts of Bupa and Axa, said pre-tax operating profits climbed 59 per cent to £436million in the 12 months to December 1.

It declared its ‘restructuring phase’ complete, after reducing costs by £160million over three years.

This has involved transforming from an investment vehicle which started life snapping up ‘zombie’ pensions and investments which have closed to new business into a more typical life insurance firm which sells pensions and insurance to new customers.

Briggs said the firm has reached a ‘turning point’ where it is generating more cash from sales of new products, while also squeezing more money from its book of closed funds.

Shares fell by 5.92 per cent to 351p, making it the biggest faller in the FTSE 100 index. But Briggs claimed Resolution is well placed to benefit from the automatic enrolment of millions of workers into company schemes.

The firm declared a full year dividend of 21.14p per share, unchanged from last year.