Goldman Sachs to Sell Majority of European Insurance Unit

Goldman Sachs Group Inc. (GS) agreed to sell a majority stake in its U.K. pension insurance business, Rothesay Life, to a handful of large investment groups, as the Wall Street firm adapts to stiffer capital rules.

Goldman in August said it would likely sell a majority stake in the insurance unit in the next 12 months, adding it to assets slated to exit from its portfolio. Goldman founded Rothesay in 2007 to focus on the U.K. pension market, and the business had nearly $10 billion in assets as of June.

Funds managed by Blackstone Group L.P. (BX) and Singapore's sovereign wealth fund, Government of Investment Singapore Corp., will each acquire 28.5% of the shares, and Massachusetts Mutual Life Insurance Co. will acquire a 7% stake.

Goldman will retain a 36% holding and remain Rothesay's largest shareholder.

The sale comes as Goldman and its rivals continue to adjust to a spate of new rules imposed on the industry since the financial crisis.

Regulators have pushed the world's biggest banks to set aside more capital to cover potential losses and have made it costlier to hold on to their investments in other financial companies. The rules have forced the banks to make tough choices.

Goldman sold a majority of its Americas reinsurance arm, Global Atlantic Financial Group, to its clients in April. In May, the New York securities firm moved to sell its remaining stake in Industrial & Commercial Bank of China Ltd. (IDCBY, 1398.HK, 601398.SH).

Goldman's shares closed Monday at $159.77 and were inactive premarket. The stock is up 25% so far this year.

Write to Ben Fox Rubin at [e-mail]

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