Tom Fraser, the new CEO of the insurance company, explains the future strategy.

At the end of November, the American insurance group Nationwide Global sold PanEuroLife, the Luxemburg insurance company, to the private investors of the American firm JC Flowers. It is the first time that a Private Equity Company buys a financial institution in Luxemburg. For PanEuroLife, which is subject to an action in court in France since 2001, this means a new start towards a better future. Tom Fraser, the new CEO, declared that the company wants to grow and to triple its turnover within the next five years.

The investment fund JC Flowers has been an active investor for several years and has been concentrating on the financial sector. That is why it is different from the 'grasshoppers", explains Tom Fraser, who was working as an advisor for the fund before accepting his new function in Luxemburg. JC Flowers possesses several holdings notably in the Netherlands and in Germany. For example, it acquired from the West LB a spectacular 51% stake in the HSH Nordbank AG for € 1.25 billion. Thus JC Flowers became the first private investor in a German savings bank. In Germany, JC Flowers also owns the Württembergische und Badische Versicherungs- AG (Wüba).

The acquisition of PanEuroLife, the price of which has not been revealed, perfectly reflects the way that JC Flowers wants to follow. The continually ageing population has a growing need for pension plans. The CEO, an Australian native, who has a long experience in the sector of life insurance and pension, added that the Luxemburg insurance company had an important potential in this field.

Tom Fraser's mission is to build the future of PanEuroLife and let its past behind its back. This experienced manager's expansion plans are ambitious. PanEuroLife will have to function like a central platform for different European insurance markets. The up to now successful Belgian business is supposed to be developed from Luxemburg. Mr. Fraser has his sight on the local market of Luxemburg as well. Moreover he is planning to open markets in the Netherlands and in Germany. Acquisitions or collaborations will make this growth possible. JC Flowers has the means to back this strategy. We are a very liquid company, said Fraser.

Tom Fraser would like to triple the turnover within the next five years. PanEuroLife currently manages a € 3.5 billion portfolio. Its capitalization is close to € 70 million. The company administers 60,000 insurance contracts and would be able to administer up to 300,000 contracts. In the medium and long term, the number of employees in Luxemburg - 105 persons today - should increase. This development is also reflected in the moving to Capellen, which is planned for March or April. The employees, who are currently spread out on three different floors at the Kirchberg, will work all together on a single floor in the new building. Moreover, this moving will increase the company profitability. "We want this good company to become a large business," summarizes the new CEO.

PanEuroLife will continue to serve its existing clients but is also interested in the increasing number of "expatriates" (rich investors living abroad). It will offer them customized products. The company will create products for financial advisors who have to respond to their clients needs in a rapid and flexible way. All the partners of JC Flowers will be of a great help in this mission.

Nationwide Global, which had bought PanEuroLife in 1999, is strategically retiring from Europe. The fact that PanEuroLife has been bought by an investment fund is a completely new thing in Luxemburg. Tom Fraser has declared that before reaching this, a lot of steps had to be made in order to convince the regulatory bodies that JC Flowers is a serious investor. Indeed the authorities have to protect the clients' interests in particular and the image of the insurance sector in general. The discussions, in which Deloitte Corporate Finance in Luxemburg took part, went off in a professional, cooperative and conscientious way. During the different meetings, both parties had the opportunity to get to know and to value each other. The commitment that JC Flowers made is an important step. It stresses the growing importance of Private-Equity for Luxemburg.

JC Flowers & Co. LLC has an office in New York and in London. It is the investment advisor for JC Flowers I LP, one of the largest investment funds specialized in the financial sector. This fund administers more than USD 900 million for strategic and financial investors and financiers. Among those investors are ABN Amro, Banco Santander, GE, Goldman, Sachs, J.P.Morgan Chase and others.