The All-Party Parliamentary Mutuals group is inviting senior staff at Bain Capital staff to appear at parliamentary inquiry into the company’s acquisition of LV=’s life and pensions business.
Matt Popoli, who is leading head of Bain Capital’s bid to buy Liverpool Victoria, has been asked to speak to MPs. The current CEO of LV=, Mark Hartigan, has agreed to appear before the cross-party Inquiry.
Labour/Co-op MP Gareth Thomas, chair of the parliamentary group, said the inquiry will ask who will benefit from the demutualisation, and whether all the consequences of the sale have been spelled out to LV=’s owners, the policy holders.
MPs on the group want to know why Bain is interested in the business “as they don’t appear to have significant insurance experience to date. Are job losses likely? And how will the purchase ultimately be funded?”
“Bain are a well-known American private equity giant founded by Republican senator Mitt Romney,” says a press release from Mr Thomas. “They have been accused in the past of buying up businesses, then funding the purchase through corporate debt loaded onto the books of the company they’re buying, cutting jobs and other costs only to sell up at a heavy profit after a few years.”
Mr Thomas said: “We’re looking forward to understanding the plans prepared by the board of LV through the evidence Mark Hartigan offers us, but we’re also keen to hear direct from Bain themselves to properly understand their plans for the future of LV if their purchase is confirmed. Additionally, anyone with an interest in the proposed demutualisation is welcome to contact the inquiry with their views.”
In a statement on the Co-op Party website, Mr Thomas said: “Mutual models are a fairer way to do business – and so I am deeply concerned about the effect this sale will have both on the members of LV= and on the market as a whole. Time and time again, we’ve seen that demutualisation rarely benefits members beyond a small initial pay out.
“Even more worrying, the sale seems to be going forward without proper scrutiny. The LV= board is attempting to do away with the democratic process which would usually require a majority of members to approve any move to demutualise, and have banned the media from attending online member meetings about the sale. Policyholders cannot even find out how much they will receive if the sale goes through. If demutualising will truly benefit all members, what is there to hide?”
Mr Thomas wants those affected by the sale to contact him to give evidence; he can be contacted via [email protected]
Co-op News has contacted LV= and Bain Capital for comment.
When it announced the sale in December 2020, LV= said the move would deliver “an excellent financial outcome for members with greater security and enhanced distributions for with-profits members” and emerged from a “board-led, comprehensive and rigorous strategic review”.
It said the sale “maintains competition and choice for customers and IFAs in the UK market by supporting LV=’s ambitions to grow its leading brand, distribution and products, adding: “Bain Capital Credit offers an unrivalled commitment and experience to LV=’s future prospects, business and people.”