Allen & Overy forges corporate link with Royal & SunAlliance US sale

Allen & Overy (A&O) is working on its first corporate deal in the UK for Royal & SunAlliance (RSA), advising on the sale of its US asset management operation, Royal & SunAlliance Investments (RSAI), to Friends Ivory & Sime.
The deal, which is worth £240m, creates one of the top-10 active fund managers in the UK, with more than £70bn under management. It is expected to complete within three months subject to regulatory and Friends Ivory shareholder approval.
RSA has instructed A&O on a number of deals on the Continent but this is the first time it has advised on an announced M&A deal in the UK.
The team is being led by corporate partners Michael McDonald and Mark Wippell with further assistance from regulatory partner Paul Phillips, pensions partner Derek Sloan, employment partner Mark Mansell, incentives partner Sylvie Watts, tax partner David Lewis and property partner David Hughs.
Wippell joined from Ashurst Moris Crisp three years ago, where he had a strong relationship with RSA.
He denied that the instruction came from his longstanding relationship with the client. However, the evidence suggests that his link with RSA has helped to consolidate the relationship with A&O in London on the corporate side.
Under the terms of the deal, RSA will enter a 10-year investment management agreement with Friends Ivory, which will manage the insurance business investment assets currently managed by RSAI.
These funds are expected to generate an annual fee income of £40m in the first year. The agreements are subject to performance criteria and a pricing review after five years.
Wippell said that the deal is significant in the asset management market because of its size. “What lies behind these types of deal is the growth of asset management. Companies need to get as many funds under management as possible so there will be a lot more deals like this to follow,” he said.
“In financial services and asset finance, A&O knows the players and it knows what the regulators will allow.
Friends Ivory was advised by a team at Norton Rose led by Andrew Mitchell and assisted by Nilam Soni.