Prudential mulling sale of stake in Eastspring Investments - report

(Sharecast News) - Prudential is reportedly considering options for its asset manager Eastspring Investments that include selling a minority stake to help broaden the business. Bloomberg cited people familiar with the matter as saying that the insurer is working with a financial adviser on a review of Eastspring. It was understood that a potential stake sale could value Singapore-based Eastspring at about $3bn.

One option includes selling about 30% of Eastspring and forming a partnership that would help it diversify in areas such as private credit and dollar-denominated assets. Sources told Bloomberg that Prudential has started sounding out prospective suitors, including other investment firms.

Bloomberg said Prudential could decide to exclude certain markets in a potential transaction. It added that considerations are preliminary and no final decisions have been made.

Representatives for Prudential and Eastspring declined to comment to Bloomberg.

A sale of a 30% stake in Eastspring at that valuation may give the insurer room to boost its total return yield to 10% from 6.3%, assuming all $900m is returned to shareholders, according to Bloomberg Intelligence senior industry analyst Steven Lam.

"The likely outcome is a mix of capital return and reinvesting the sale proceeds in markets with strong new-business growth potential such as mainland China and Southeast Asia," Lam wrote on Tuesday.