Thursday 22 February 2018

Mercer halts investment in ILIM, blaming uncertainty at parent IL&P

Laura Noonan

INVESTMENT advisory giant Mercer is publicly refusing to put any new client money into Irish Life Investment Managers, citing "general uncertainty" surrounding parent company Irish Life & Permanent.

The news comes as IL&P's life insurance and investment businesses look set to be auctioned off to help plug a massive capital hole at the group's Permanent TSB bank.

In a note to clients, Mercer said its manager research team had put ILIM on "provision rating" due to "general uncertainty" surrounding IL&P.

"The main implication of a Provisional Rating is that Mercer will not put ILIM forward for any new investment business opportunities while the Provisional Rating applies," a spokeswoman confirmed yesterday.

She added Mercer did "not deem it necessary" for clients currently invested in ILIM to "take any action at present".

ILIM investment director Patrick Burke said: "Politically, we want it removed as soon as possible. The sooner the restructuring of Permanent TSB is completed and we can get more certainty, the better."

Mr Burke added that while there should be more certainty "in the next twenty four hours" the Provisional Rating could stay in place for "months".

But he stressed that ILIM had been trading "very well" so far this year, despite issues surrounding its parent. The investment management arm has a "budget" of €2.5bn in sales for the full year. Mr Burke said they already have sales or "sales in the pipeline" of €2bn.

Last year, ILIM had a sales target of €1.8bn and hit €2.2bn.

"Other investment managers aren't fully managed out of Ireland, so we can be really close to clients in a way that isn't always possible for investment managers overseas," Mr Burke said.

"We're still winning a lot of business."

Mercer also issued a note earlier this week "notifying" clients of the IL&P's recent downgrade by ratings agency S&P and of the imminent stress tests results. "We remain of the view that ILA [Irish Life Assurance] meets all the Central Bank regulatory requirements and continue to place business with ILA," Mercer said.

Irish Independent

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