Legal & General takes major stake in London Capital Group

British financial services and life assurance company Legal & General Group Plc (LON:LGEN) has increased its stake in newly rejuvenated London Capital Group Holdings plc (LON:LCG) to 14.57% of the firm’s share capital.

It is a relative rarity among Britain’s large and long established traditional financial services companies which provide pensions, life assurance, endowments and bonds as well as general home and car insurance to invest in electronic trading firms, however this substantial interest in one of London’s long established CFD and spread betting companies demonstrates that there is potential synergy among the City’s large conglomerates.

According to filings which have been reported by Legal and General’s investment management division via London Capital Group, the increment in share capital was conducted via two transactions, one in which Legal & General increased its number of shares to 4,195,110, providing that particular division of the company with a 5.94% stake, and Legal & General Investment Management (LGIM) now holding 10,282,387 shares, resulting in a 14.57% share of the firm.

Following this acquisition of a major interest in London Capital Group by Legal and General, the stake held in the firm is split between Legal and General’s various business units as follows:

Legal & General Group Plc (Direct and Indirect) (Group) ( 10,282,387 -14.57%= Total Position)

Legal & General Investment Management (Holdings) Limited (LGIMH) (Direct and Indirect) ( 10,282,387 – 14.57%= Total Position)

Legal & General Investment Management Limited (Indirect) (LGIM) ( 10,282,387 – 14.57%= Total Position)

Legal & General (Unit Trust Managers) Limited ( 6,087,277 -8.62%= UTM)

Legal & General Group Plc (Direct) (L&G) ( 4,195,110 – 5.94%=LGAS, LGPL & PMC)

Legal & General Insurance Holdings Limited (Direct) (LGIH) ( 4,195,110 – 5.94%= LGAS & LGPL)

Legal & General Assurance Society Limited (LGAS & LGPL) ( 4,195,110 – 5.94%= LGAS & LGPL)

London Capital Group has been the subject of a substantial restructuring exercise following its financing package of £17 million provided by GLIO Holdings’ Charles-Henri Sabet, a prominent FX industry figure.

Mr. Sabet’s remit following his investment was to turn the fortunes of long-established but flagging London Capital Group around. He attracted some senior industry talent to the management team shortly after assuming the position of Chairman of the Board, including former FXCM Managing Director Francois Nembrini, and 28-year ICAP veteran Peter Wells.

The company began its transformation into a major institutional liquidity and technology provider late last year, and began to propel itself out of the doldrums and into a prominent company among London’s electronic trading sector. Mr. Sabet introduced some ingenious corporate directives, including a an Employee Benefits Trust which was funded by a $3.1 million loan from GLIO to purchase 9 million shares to be held on behalf of employees, as well as his own interest in the firm which involved Mr. Sabet’s personal purchase of over $330,000 worth of shares in London Capital Group on the open market, along with an equal amount to be placed in the treasury.

In January this year, GLIO began to convert its loan notes into London Capital Group shares.

In this particular transaction, Legal & General’s wish to increase its long-standing shareholding in the firm to such a high level demonstrates that corporate interest in London Capital Group post restructure is gaining momentum.

For the full announcement from London Capital Group, click here.

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