London billionaire Michael Spencer boosts stake in Singapore Life to 63pc

  • Michael Spencer has boosted his stake in the firm to 63 per cent from 29 per cent through his private company IPGL
  • Spencer paid US$52.7 million to Chong Sing Holdings to acquire the additional 33.8 per cent stake
  • An eventual IPO is “certainly” part of the aspirations for Singapore Life, says Singapore Life CEO Walter de Oude
PUBLISHED : Friday, 07 December, 2018, 4:38pm
UPDATED : Friday, 07 December, 2018, 9:42pm

Singapore Life said the increased investment this week from British billionaire Michael Spencer, who boost his stake in the firm to 63 per cent from 29 per cent, is a precursor to potentially more new investors.

Singapore Life chief executive Walter de Oude told the Post that he will continue to channel investment into new technology to tap opportunities in internet-basesd services that increasingly straddle across insurance, asset management and banking.

In January Singapore Life bought S$6 billion (US$4.38 billion) worth of life coverage from Zurich Life Singapore and has since grown total coverage to S$6.6 billion, de Oude said.

Hong Kong-listed Chong Sing Holdings Fintech said in an exchange filing on Thursday that it has sold its 33.8 per cent stake in Singapore Life to IPGL, controlled by Spencer, for about US$52.7 million, valuing the start-up at US$156 million. The sale is expected to generate a gain of about US$37 million to Chong Sing Holdings.

“The disposal represents a strategic opportunity to optimise the group’s business portfolio while realising substantial value from the transaction,” the company said in the filing. Chong Sing Holdings, an online lending and payment operator which has recently also applied for a virtual banking licence in Hong Kong, said it would use the proceeds for general working capital.

De Oude said that the increased investment from IPGL is likely to also bring “new investor partners to the shareholder consortium” and a stronger capital base going forward.

“Singapore Life is growing so quickly we have received a large amount of interest from the capital markets [towards the company]. This transaction is the first step in a series of transactions that would grow our capital base,” said de Oude.

He also said an initial public offering is “certainly in Singapore Life’s aspiration”.

Founded in June 2017, Singapore Life offers digital insurance solutions such as a chatbot that leverages artificial intelligence to help guide customers calculating their life insurance coverage needs. However, it also distributes its policies through private banks and independent financial advisers.

Today, about a third of their business is distributed entirely through online channels, and two-thirds via agents and advisers. But de Oude said going forward he expects growth in sales through digital channels will outpace growth in sales through traditional advisory channels.

One new digital capability in which the firm is investing is a digital wallet. Singapore Life wants to enable clients to manage both wealth and insurance services together to make “their financial services easier through the insurance backbone”, he said. Before founding Singapore Life, de Oude was the chief executive of HSBC’s Singapore insurance unit.

According to the Hong Kong GEM filing, Singapore Life recorded unaudited profit of about US$4.6 million for the January to September period, turning around from an audited loss of about US$5 million for the whole year of 2017.

Spencer is known for founding interdealer broker ICAP, which he later sold a large part to Tullet Prebon in 2016. He remains a shareholder in the remaining businesses, renamed as NEX Group, a broker that focuses on electronic trading and post trade services. From 2006 to 2010 Spencer also served as treasurer of Britain’s Conservative Party.