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{{Logo Image|[[File:Aspire image.jpg|alt=Aspire image|thumb|Aspire image]]}}
Phoenix Group Holdings is committed to helping people achieve a secure financial future, offering innovative retirement solutions and long-term savings products.


{{Cover Image|[[File:IStock-1220881440-scaled.jpg]]}}
The company operates as a leading UK life and pensions provider, specialising in retirement solutions, long-term savings, and investment management. Phoenix prioritises the delivery of value-driven investments with a strong emphasis on environmental, social, and governance (ESG) principles, ensuring that its investment portfolios align with the evolving needs of its customers and society. Phoenix also focuses on managing long-term liabilities and capital efficiency, seeking to provide sustainable financial growth while supporting the retirement security of its policyholders.


== Summary<ref name=":0">Source: Edison Investment Research.</ref> ==
Assuming Phoenix Group maintains a steady market position in the life insurance and pensions sectors, with modest growth in its asset management services, the expected return of an investment in the company over the next five years is positive 16%, which equates to an annual return of 3.1%. In other words, an £100,000 investment in Phoenix Group is expected to return £116,000 in five years' time.
Aspire Global (AG) is an online gaming technology, services and content company that offers its customers, online gaming operators, everything that is required to operate a successful iGaming brand. The global online gaming market is experiencing structural growth and AG’s leading technology and services help customers manage the many operational and regulatory complexities of online gaming, while minimising their investment and mitigating their increasing cost pressures. Its success is apparent in its increasing geographic presence (26 markets) and roster of leading online gaming brands. AG is trading at a significant discount to its larger peers; our DCF-based valuation points to a share price of SEK95.


'''Well positioned for greater geographic scale'''
The degree of risk associated with an investment in Phoenix Group is ‘moderate’, with the shares having a beta that is 22% below the market (0.78 vs. 1). Additionally, Phoenix Group’s shares show a ‘medium’ level of liquidity, as evidenced by its bid-ask margin of 0.02%.


Following recent acquisitions giving AG a presence across most parts of the iGaming value chain, management’s current strategy has four key pillars: a stronger product offer, organic growth, M&A, and geographic expansion. The aim is to expand its scalable platforms into more markets and increase the number of customers per market, organically and via the acquisition of complementary companies to enhance the offer. AG looks well placed to benefit from the structural growth drivers, and regulatory and operational issues facing its customers. The United States is a particular area of focus.
Accordingly, based on the assumptions provided on the Stockhub platform, an investment in the company is considered to be a ‘suitable’ one for you if, among other criteria, your required:


'''FY21: Improving profitability and cash flow'''
* Return level is 3.1% per year or more in absolute terms;
* Risk level is 22% below the market risk level;
* Time horizon is five years or longer;
* Bid-ask margin is 0.02% or more; and/or
* Objective is to invest in a stable, long-term provider of pensions and insurance solutions that aligns with responsible investment principles.


Edison Investment Research forecasts EBITDA growth of 15% (pro forma) in FY21, and 17% in FY22. Our forecast for EBITDA of €32.8m (using AG’s definition) in FY21 is greater than management’s longstanding (December 2018) guidance of €32.0m due to recent higher-margin acquisitions. Edison Investment Research expects improving free cash flow due to higher profitability while investment levels relative to revenue are maintained. The company has a robust balance sheet with limited net debt (€5.2m) excluding minimal IFRS 16 leases. Its improving financial position could enable the restoration of the dividend in FY21, following a period of M&A.
'''Fun fact:''' Phoenix Group Holdings was founded in 1782 and has grown into one of the UK’s largest providers of long-term savings and retirement solutions. It primarily focuses on closed life funds and the acquisition of life insurance businesses.


'''Valuation: Well below peers'''
== Operations ==


AG is trading at a significant discount to the majority of its peers. Its EV/EBIT multiple for FY21 of 10.2x is a 63% discount to an adjusted average of peers, and the P/E of 11.3x is a 74% discount to the adjusted average. A DCF-based valuation with a WACC of 9% and terminal growth of 2% suggests a share price of SEK95. As AG’s scale increases, Edison Investment Research would expect the valuation gap to its larger peers to narrow.
=== How did the idea of the company come about? ===
==Investment summary<ref name=":0" />==
Phoenix Group Holdings was created with the aim of acquiring and managing closed life insurance and pension funds. Founded in 2009, it evolved from the Phoenix Assurance Company, which had traditionally provided life insurance. The modern group focused on acquiring legacy insurance portfolios—companies that no longer wrote new policies but still had substantial liabilities. By acquiring underperforming insurers, Phoenix aimed to improve efficiency, optimise capital, and unlock value from these closed books, growing into a major consolidator in the UK life insurance sector.


===Company description: iGaming infrastructure and services===
=== What's the mission of the company? ===
The mission of Phoenix Group Holdings is to deliver long-term value for its shareholders, policyholders, and other stakeholders by efficiently managing and growing closed life insurance and pension businesses. The company focuses on maximising the value of legacy insurance portfolios through operational improvements, capital optimisation, and the responsible management of policyholder liabilities. Their goal is to ensure financial security for policyholders while achieving sustainable, profitable growth for investors.


AG is an online gaming technology, services, and content company with two main reportable business segments. The B2B offering comprises a robust technology platform, managed services, and content (ie games) that provide everything required to launch and operate an iGaming brand. The platform can be offered in isolation or with a wide range of managed services. The B2C offering includes a number of proprietary online gaming brands, which it markets to its own online customers. In March 2021, management announced that it is reviewing the role of the B2C segment within the group structure to determine how to enhance its growth prospects.
=== What are the main offerings of the company? ===
Phoenix Group Holdings primarily offers closed-book life insurance and pension solutions. Their key offerings include:


AG is exposed to favourable growth trends. First, its customers in the online gaming market are enjoying structural growth due to increasing global wealth and internet/mobile penetration. The geographic markets to which AG currently has some exposure are forecast to grow gross gaming revenue (GGR; ie customer wagers less their winnings) from US$37.6bn in 2019 to US$69.1bn by 2025 (source: H2 Gambling Capital). Secondly, the online gaming markets are highly competitive, and each country typically has different regulations, if regulated at all, and they are subject to regular change. These forces combine to make the operation of an online gaming brand challenging, particularly when working across many geographies. The broad long-term trend is for markets to become regulated, which typically leads to higher costs for operators; therefore, the operators seek partners that can help mitigate these cost pressures. AG’s full-service platform, managed services and content can minimise the investment requirements of its customers, leading to a faster and more efficient route to market and ongoing ‘shared’ operating ‘cost efficiencies’. AG’s strategy is to increase its exposure to regulated markets, in line with the direction of travel of the market which, although it incurs greater costs, also brings more clarity on market structure and predictability of financials.
# '''Life Insurance:''' Managing legacy life insurance policies that are no longer open to new customers, focusing on optimising the value of existing portfolios.
# '''Pension Schemes:''' Overseeing pension funds and annuities for individuals and institutions, ensuring they are managed efficiently.
# '''Asset Management:''' The company offers investment management services for the assets backing its insurance and pension liabilities.
# '''Investment and Capital Management:''' Phoenix Group aims to enhance the value of its acquired portfolios through strategic capital management, risk optimisation, and operational efficiency.


Management’s strategy has four key pillars: a stronger product offer, organic growth, M&A, and geographic expansion. The aim is to expand its scalable platforms into more markets and increase the number of customers per market, both organically and through the acquisition of complementary companies. At the end of FY20, AG had 150 partners (customers) including many of the leading online gaming companies: betfair, Codere, Cofina, Editec, Entain, 888.com and William Hill; with broad geographic coverage, in 26 countries across most continents, which is testament to the quality of AG’s platform, services and content. The Pariplay acquisition and consequent further investment in the US have led to a breakthrough in the US market, which represents an important growth market. At the start of FY21, AG received an interim iGaming supplier licence for West Virginia and has filed applications in Pennsylvania and Michigan, with more to come. AG is building up the organisation to support its US expansion.
These offerings are centered around managing closed insurance and pension books, with a focus on long-term value creation for policyholders and investors.


===Financials: Improving profitability and cash flow generation===
=== What makes the offerings unique? ===
What makes Phoenix Group Holdings' offerings unique is their focus on managing closed-book insurance and pension portfolios, businesses that no longer write new policies but still have significant liabilities. This specialisation is backed by key facts:


Edison Investment Research forecasts EBITDA growth of 15% (pro forma) in FY21, and 17% in FY22. Our forecast for EBITDA of €32.8m in FY21 is greater than management’s longstanding (December 2018) guidance of €32.0m, which reflects the higher margins of recent acquisitions. Edison Investment Research expects improving free cash flow, mainly due to higher profitability as investment levels relative to revenue are maintained. AG has a robust balance sheet with limited net debt excluding IFRS leases (€5.2m), and a capital-light business model. FY20 net debt included debt of €27.9m due to mature in April 2021, which is to be funded by cash on hand and a c €10m bridging loan from controlling shareholders, ahead of the receipt in March 2022 of a loan made to NeoGames, which shares two board directors with AG, of up to c €18.0m including accrued interest. The FY20 balance sheet also included deferred and contingent consideration of €22.9m, of which c €5m will be paid in FY21 and the balance in FY23.
# '''Specialisation in Closed-Book Management:''' Phoenix Group is one of the largest consolidators of closed life insurance and pension books in the UK, managing over £300 billion in assets. It has acquired major portfolios, including from Standard Life (2018) and ReAssure (2020), demonstrating its leadership in this niche market.
# '''Operational Efficiency:''' Phoenix has a proven track record of improving operational performance. Following the Standard Life acquisition, the company implemented cost-saving measures that led to over £50 million in annual savings. Additionally, its £1 billion cost-saving program announced in 2020 highlights its focus on streamlining operations and improving efficiency across its legacy portfolio.
# '''Capital and Liability Optimisation:''' Phoenix utilises advanced capital management techniques, such as those seen in the £1.1 billion pension scheme buyout from Standard Life, which helped reduce risk and unlock value. The group also manages liabilities efficiently through Solvency II capital management, ensuring long-term sustainability and optimised returns.
# '''Focus on Long-Term Stability:''' Phoenix’s commitment to long-term financial security for policyholders is reflected in its 200% solvency ratio, well above regulatory requirements. The group also reported 9% growth in operating profit in 2023, alongside a consistent dividend track record, underscoring its ability to provide steady returns to shareholders while meeting policyholder obligations.


===Valuation: Discount to peers and DCF===
These factors combine to make Phoenix Group’s offerings distinct, focusing on operational efficiencies, capital optimisation, and long-term stability in the management of legacy insurance and pension portfolios.


AG is trading at a significant discount to the majority of its peers when comparing all multiple-based valuation measures, and it potentially offers a higher dividend yield than all of its peers should it resume dividend payments from FY21, given an expected improved financial position. AG’s EV/EBIT multiple for FY21 of 10.2x is a 63% discount to an adjusted average of peers (ie excluding some extreme multiples) and its P/E of 11.3x is a 74% discount to the adjusted average of 44.1x. A DCF-based valuation with a WACC of 9% and terminal growth of 2% suggests a share price of SEK95. AG continues to scale well through a combination of organic growth and M&A. As it continues to scale, Edison Investment Research expects the valuation gap relative to its peers to narrow.
=== From which place(s) are the offerings able to be purchased? ===
Phoenix Group's offerings are primarily available to existing policyholders and pension plan participants through their legacy insurance portfolios. Since the company focuses on managing closed books (policies no longer open for new customers), its products are not available for purchase by new clients. Instead, Phoenix manages and services existing life insurance and pension policies that were previously sold by acquired businesses.


===Sensitivities: Regulation, competition, and execution===
Their offerings are available in the UK, where they have a significant presence, and the company’s services are accessible to policyholders through their digital platforms, customer service teams, and financial advisors. Additionally, Phoenix Group has operations in various European markets through acquired businesses. However, new policy purchases are not part of their current business model.


AG’s revenue sharing model makes it closely aligned with the fortunes of its operator customers and the geographies in which they operate. The gaming industry is highly competitive, as is the market for AG’s products and services, and regulatory risk is high for operators. To grow geographically and develop its product offer, AG must continue to invest to remain competitive in a rapidly changing industry, through a combination of internal investment and M&A, which have execution and integration risks.
=== From which place(s) are the offerings promoted? ===
Phoenix Group's offerings are primarily promoted in the UK and Ireland, where it has a strong presence. The company's promotional efforts focus on:


==Company description: Online gaming infrastructure<ref name=":0" />==
# '''Existing Customers:''' Phoenix promotes its services and offerings to current policyholders through direct communications, customer support, and digital channels, emphasising the management of legacy insurance and pension portfolios.
# '''Investor Relations:''' Phoenix also promotes its financial products and services to investors, showcasing its strategy of acquiring and managing closed books, through annual reports, investor presentations, and shareholder updates.
# '''Acquired Businesses:''' The company may also promote its offerings indirectly through the brands of acquired insurers, such as Standard Life and Scottish Widows, which still serve policyholders under the Phoenix Group umbrella.
# '''Digital Platforms:''' Phoenix Group also uses its websites and digital platforms to communicate with both policyholders and investors, promoting its financial management strategies and policyholder services.


AG is an online gaming technology, managed services, and content company with two main reportable business segments – B2B and B2C – that target different parts of the iGaming value chain. The names of the segments denote the main customers served and, by definition, the products offered.
Overall, promotion is largely directed at existing stakeholders, given the closed-book nature of its business model.


===B2B (69% FY20 pro forma revenue, 78% pro forma EBITDA)===
=== What's the current strategy of the company? ===
Phoenix Group's current strategy focuses on sustainable growth, capital optimisation, and maximising the value of legacy insurance and pension portfolios. Key aspects of the strategy include:


B2B offers customers, the online gaming operators, everything that is required to operate a successful iGaming brand for casino games and sports betting. B2B’s revenue has grown from €30.0m in FY16 to €110.9m in FY20, a CAGR of c 39%, and EBITDA has grown from €7.2m to €20.9m, a CAGR of c 31%. Within B2B there are three reportable sub-segments:
# '''Acquisitions and Consolidation:''' Phoenix continues to grow by acquiring and managing closed-book life insurance and pension portfolios, enhancing its scale and operational efficiency. They focus on integrating acquired businesses, such as Standard Life, and improving their profitability.
# '''Operational Efficiency:''' The group aims to optimise its cost base, improve capital efficiency, and maximise returns from its existing portfolio of life insurance and pension policies. This includes enhancing digital services and improving customer experience for policyholders.
# '''Responsible Capital Management:''' Phoenix focuses on managing its capital efficiently to support growth and provide attractive returns to shareholders. This includes maintaining a strong balance sheet and ensuring adequate liquidity.
# '''Sustainability and Responsible Investment:''' The company is increasingly focused on aligning its operations with sustainable practices, including responsible investing, to meet evolving regulatory requirements and enhance long-term value.
# '''Customer-Centric Approach:''' While not writing new policies, Phoenix aims to deliver strong value for existing policyholders by managing their policies effectively, providing transparent communications, and focusing on delivering on the promises made to them.


* Core is the proprietary, industry-leading platform and services that manages every aspect of the customer’s requirements to launch and operate a successful iGaming brand. These include the underlying technology platform and managed services that help customers with regulation and compliance, payment and processing, risk management, CRM, and support. The platform can be offered on its own or in combination with the managed services or content. In FY20 Core’s reported revenue was €92.7m and EBITDA was €16.1m; on a pro forma basis it represented 56% of revenue and 57% of EBITDA.
Overall, Phoenix Group's strategy is centered around strengthening its position as a leading consolidator of closed life and pension books, while ensuring long-term growth and value creation for both policyholders and investors.


* Games is a relatively new division that was formed on the October 2019 acquisition of Pariplay, a leading games creation and aggregation platform that offers proprietary and third-party games to operators. In FY20, Games contributed revenue of €16.0m and EBITDA of €4.2m, representing 10% of revenue and 15% of EBITDA on a pro forma basis.
== Competition ==
Phoenix Group, as a leading life insurance and pension provider primarily focused on managing closed insurance books and pensions in the UK, faces competition from companies with similar business models or overlapping areas in insurance, asset management, and retirement solutions. Key competitors include:


* Sports is the online sportsbook platform provider BtoBet that was acquired in October 2020. It contributed revenue of €2.2m and EBITDA of €0.6m to AG’s FY20 results. On a pro forma basis, its revenue of €6.8m and EBITDA of €2.1m represent 4% and 7% of the group total, respectively.
# '''Legal & General Group (L&G)''': L&G competes with Phoenix in life insurance, pensions, and retirement products. It also has significant expertise in asset management and bulk annuities, making it a major player in managing large pension schemes.
# '''Aviva''': Aviva is another significant UK-based competitor in life insurance and pensions. Aviva provides services in retirement planning, life insurance, and asset management. Its focus on digital transformation and customer engagement is a strategic advantage.
# '''Swiss Re (ReAssure)''': Phoenix acquired ReAssure from Swiss Re in 2020, a move that underscored the competitive landscape in closed life books. Swiss Re remains an indirect competitor, as it focuses on reinsurance and has relationships with other UK life insurers and closed-book specialists.
# '''Standard Life (part of Phoenix)''' and '''Scottish Widows (Lloyds Banking Group)''': Scottish Widows competes in the pensions and life insurance markets. It also provides pension de-risking solutions and bulk annuity products, similar to Phoenix’s focus, especially through Standard Life.
# '''M&G plc''': M&G combines asset management with pension solutions and life insurance products. As an investment manager, it competes with Phoenix in asset management and pension scheme management. Its pension expertise is a key overlap with Phoenix’s retirement-focused services.
# '''Rothesay Life''': Rothesay Life is a specialist insurer focusing on bulk annuities and pension de-risking solutions. It’s a major player in managing pension liabilities, directly competing with Phoenix in acquiring large closed pension books.
Phoenix Group's core strategy centers around closed book acquisitions, bulk annuities, and retirement-focused services, which makes companies specialising in managing long-term pension liabilities and closed books its closest competitors. Additionally, the push toward digital transformation, asset management capabilities, and pension de-risking solutions is common among these firms, placing them in a tight competitive landscape.


===B2C (31% FY20 pro forma revenue, 22% pro forma EBITDA)===
== Market ==
To understand Phoenix Group’s market opportunity, let’s look at its '''Total Addressable Market (TAM)''', '''Serviceable Available Market (SAM)''', and '''Serviceable Obtainable Market (SOM)''', specifically in the context of its primary business lines, which include '''closed-book life insurance''', '''open-book insurance''', '''Bulk Purchase Annuities (BPAs)''', and '''retirement solutions'''.


B2C operates proprietary online casino brands, including Karamba, and sports brands that use AG’s B2B technology and services (above), and markets them to AG’s own online customers. In February 2021, the board of directors instructed management to conduct a review of the B2C segment in order to identify how to enhance its future growth prospects, the outcome of which may include a disposal of the segment or a merger. In FY20, B2C’s revenue of €51.0m and EBITDA of €6.2m represented 31% and 22% of the pro forma group total, a lower margin of 12.1% versus the group average of 16.7%.
=== 1. '''Total Addressable Market (TAM)''' ===


On a pro forma basis, that is including 12 months of BtoBet’s revenue and EBITDA, AG’s revenue was €166.9m and EBITDA was €28.5m.
* '''Definition''': The '''TAM''' is the total revenue opportunity available if Phoenix Group could achieve 100% market share in all its target sectors.
* '''Market Size''': The TAM for Phoenix includes:
** The '''global life insurance market''', especially in regions with significant closed-book insurance business (UK, Europe, some parts of North America).
** The '''global pension market''', as companies seek to offload pension liabilities via Bulk Purchase Annuities (BPAs).
** The '''global retirement solutions and wealth management market''', given the increasing demand for retirement products as populations age.
* '''Estimated TAM''': For Phoenix, the TAM is likely in the '''trillions''' in GBP, as the global life insurance market alone is estimated to be worth several trillion dollars annually. However, for closed-book management and pension buyouts specifically, estimates suggest an addressable market in the '''hundreds of billions''', particularly in Europe and North America, where regulatory and aging demographics drive demand.


Depending on the segment, AG may disclose a number of revenue figures. Management discloses revenue gross of VAT, which is similar to how the online gaming operators, for example bet-at-home, report revenue, and also net of VAT. It reports revenue gross of VAT, as unlike most other B2B peers, it receives net gaming revenue (NGR) directly from the ultimate customers, that is the players of the games, before sharing the revenue with the operators, expensed further down the income statement. This is in contrast to the majority of its peers, which receive their net share of revenue from the online gaming operators. As a result, it is not possible to directly compare reported revenue and EBITDA margins versus peers. It makes the use of sales-based multiples analysis versus its peers meaningless too. Management’s commentary on revenue and profitability, specifically EBITDA, is typically with reference to revenue including VAT, therefore Edison Investment Research will be consistent with management’s narrative. For some segments, AG also reports a higher revenue figure that includes inter-segment revenue, which Edison Investment Research does not use.
=== 2. '''Serviceable Available Market (SAM)''' ===


In addition, the company includes share-based payments in EBITDA whereas Edison Investment Research customarily excludes them. At the divisional level, share-based payments are not disclosed, therefore in the commentary on the segments and group performance Edison Investment Research will use management’s definition of EBITDA, but our presented EBITDA numbers in the financial summary use our definition. The difference is not material; in FY20, share-based payments were €0.5m, equivalent to c 40bps on EBITDA margin.
* '''Definition''': The '''SAM''' represents the portion of the TAM that Phoenix Group could realistically service, given its specific focus and operational capabilities.
* '''Market Focus''':
** '''UK and European Closed-Book Life Insurance''': Phoenix Group is one of the largest consolidators of closed-book policies in the UK and Europe. The closed-book market in Europe alone is estimated to hold '''£300 billion to £400 billion''' in assets under management.
** '''Bulk Purchase Annuities (BPA)''': In the UK, the BPA market has seen significant growth, with estimates suggesting it’s worth around '''£30 billion annually'''. As more companies offload pension liabilities, this market is expected to grow.
** '''UK Retirement and Wealth Solutions''': Given its acquisition of Standard Life and expansion into the open-book market, Phoenix can also tap into the retirement solutions market, worth an estimated '''£1 trillion''' in the UK alone.
* '''Estimated SAM''': For Phoenix, the SAM is likely in the '''hundreds of billions of pounds''', focusing primarily on the UK and European closed-book life insurance market, BPAs, and retirement solutions.


===AG’s evolution===
=== 3. '''Serviceable Obtainable Market (SOM)''' ===


The company was founded in 2005 as NeoPoint Technologies, initially focused on the online scratch cards market, and the subsequent launch of a proprietary online slots site in the UK in the same year. In 2008 AG acquired its first online gaming licence in Malta and the company signed B2B partnerships in eight markets. In 2014, the online lottery business NeoGames was transferred to a separate company and subsequently sold by AG, and the remaining company, whose focus was the current Core business, was changed to AG.
* '''Definition''': The '''SOM''' is the portion of the SAM that Phoenix Group can realistically capture, given competition, regulatory constraints, and its existing market share.
* '''Competitive Position''':
** '''Closed-Book Consolidation''': Phoenix already holds a significant market share in the UK closed-book insurance market. Its scale, expertise, and established relationships position it to capture a substantial portion of this market. Realistically, Phoenix could maintain a '''10-20% share''' of the UK and European closed-book market, equating to '''£30-60 billion'''.
** '''BPAs''': Phoenix is actively growing its presence in the BPA market. Given competition from other insurers like Legal & General, Phoenix might capture '''5-10% of the BPA market''', which could mean around '''£1.5-3 billion annually'''.
** '''Retirement and Wealth Solutions''': This is a competitive market with players like Aviva, Prudential, and Standard Life. Phoenix’s SOM here could be around '''5%''', or '''£50 billion''', within the UK retirement solutions market.
* '''Estimated SOM''': Combining these factors, Phoenix’s SOM might realistically be between '''£80 billion to £120 billion''' across its primary markets. This includes substantial market share in closed-book management, a growing foothold in BPAs, and a smaller but strategic presence in retirement solutions.


Since 2014, AG has focused on improving its B2B offering by investing in its technology, extending the product offer, and increasing the number of proprietary brands. In so doing, AG has extended its geographic reach of online licences and certifications, as well as withdrawing from certain countries so that by the end of 2020 it and its clients operate in 26 markets across Europe, the US, South America, and Africa.
=== Summary of TAM, SAM, and SOM for Phoenix Group: ===
{| class="wikitable"
!Metric
!Market Size
!Key Focus Areas
|-
|'''TAM''' (Total Addressable Market)
|'''£1+ trillion'''
|Global life insurance, pensions, retirement solutions
|-
|'''SAM''' (Serviceable Available Market)
|'''£200-400 billion'''
|UK and European closed-book, BPAs, UK retirement solutions
|-
|'''SOM''' (Serviceable Obtainable Market)
|'''£80-120 billion'''
|UK and European closed-book, BPAs, retirement solutions in the UK
|}
Phoenix’s strengths in '''closed-book consolidation''', its expanding '''BPA business''', and '''retirement solutions''' provide it with a substantial and accessible market within the broader insurance and retirement sector. This focus allows it to capitalise on '''predictable cash flows''' from closed books and emerging opportunities in BPAs, while building a foothold in the growing retirement market.


A sportsbook was initially launched in FY17, which was subsequently added to the platform in FY18, extending its reach beyond the core of casino games. The acquisition of Pariplay, a global online game studio and aggregator, was completed in October 2019, and this was followed by the acquisition of BtoBet, a leading sportsbook, which completed in October 2020.
== Team ==
As of 2024, the key members of the leadership team at Phoenix Group Holdings include:


In July 2017, the shares were listed on the Nasdaq First North Premier Growth Market in Sweden at a share price of SEK30, valuing the company at SEK1,323m.
'''Andy Briggs – Group Chief Executive Officer'''


===Geographic presence===
Andy Briggs has been the CEO of Phoenix Group since 2015 and leads the company's strategic direction, focusing on growth through acquisitions and operational efficiency.


AG is based in Malta and has a physical office presence in Bulgaria, Gibraltar, India, Israel, Italy, North Macedonia, and Ukraine. Under EU law, Maltese gaming licences are effective in all EU member states due to the freedom of movement within the EU, as long as online gaming is legal in the respective member country.
'''Clare Bousfield – Group Chief Financial Officer'''


It has a broad global presence with customers in 26 countries across Europe, Africa, Latin America, and the US. In these countries, AG either has a licence to operate its platform or services, or its platform is certified in those countries, with the operator customer holding its own licence.
Clare Bousfield oversees financial strategy, capital management, and reporting, ensuring the group's financial health and sustainable growth.


In FY20, AG’s source of revenue on a reported basis (not including the full effect of the recent Sports acquisition, which has greater exposure to Africa and Latin America) was: the Nordics €16.4m (10% of total), UK and Ireland €35.1m (22%), rest of Europe €98.2m (61%) and rest of world €12.2m (8%).
'''Keith Skeoch – Chairman'''


==Business overview<ref name=":0" />==
Keith Skeoch is the Chairman of Phoenix Group and has significant experience in financial services. He provides leadership and governance to the board.


The players are individuals who visit the operator’s site to game.
'''Ian McKenna – Chief Risk Officer'''


A platform is the technical infrastructure for an online gaming site. Typically, the large online gaming operators usually use their own proprietary systems, and the small to mid-sized operators use third-party platforms. As shown in Exhibit 14, AG’s scale is smaller than peers including Evolution Gaming, International Game Technology and Scientific Games. However, as shown below, AG continues to build scale by winning new clients, including the large, tier one clients (such as Betfair and William Hill) due to its leading technology platform in new geographies, while increasing spend from those customers.
Ian McKenna is responsible for overseeing risk management at Phoenix Group, ensuring that operational, financial, and regulatory risks are effectively managed.


Online gaming operators provide the B2C offering, for example sports, casino or bingo, to players. In regulated markets, operators must have access to a licence.
'''Paul Brewer – Chief Operating Officer'''


Game developers provide games to the platforms; the games are typically developed for ‘plug and play’ into the platforms, allowing operators to customise the offering and branding quickly.
Paul Brewer manages the operational aspects of Phoenix Group, including business integration from acquisitions and optimising customer service.


===Core===
The leadership team is supported by various senior managers responsible for specific business areas such as investments, legal and compliance, and technology.


Core is AG’s proprietary platform and managed services, which comprise all the technical, regulatory, and administrative requirements of operating an iGaming brand. The technical platform can be offered in isolation or combined with the range of managed services.
== Risks ==
As with any investment, investing in Phoenix Group Holdings carries a level of risk. Overall, based on the Phoenix Group Holdings' adjusted beta (i.e. 0.76), the degree of risk associated with an investment in Phoenix Group Holdings is 'medium'.


From a technical perspective, the platform provides everything from back-end configuration to the user interface and integration with third parties, eg content providers. From an operational perspective, the managed services cover everything from regulation and compliance including licence administration, payment processing and risk management, CRM including data analysis and business intelligence, customer support and player value optimisation.
Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of  between 0.50 and 1.00. Further information about the beta ratings can be found in the appendix section of this report.


Use of the platform means that operators do not need to invest resources in developing/running their own technology or full-service platform, leading to a faster and more efficient route to market and ongoing operating cost efficiencies with a high level of professional services. While all operators have different cost structures given different product offers, market positioning, etc, Edison Investment Research highlights that bet-at-home’s ‘other’ costs (ie excluding duties, marketing, and personnel costs), which includes expenses for platform, represented c 16% of GGR. AG’s management has estimated that the full product suite of platform and managed services can lead to operating cost savings of 20% for the operators.
The key risks can be found below. For us, currently, the biggest risk to the valuation of the company relates to interest rate volatility (i.e. interest rate risk).


The platform is very ‘sticky’, given its access to certifications/licences and the analytical tools available. In addition, management claims that the platform’s up-times are higher than those of competitors. Hence, once a client is on board, there would have to be a very good reason for it to leave given the inconvenience of changing the licence/certification, having to integrate with another provider and the loss of analytics. The relatively consistent increase in the number of partners/brands that use the platform (see Exhibit 5) provides proof of AG’s competitive positioning. The key services include:
=== 1. '''Regulatory and Legislative Risks''' ===


* Licences and platform certifications in regulated markets: AG has gaming licences in regulated markets including the UK, Denmark, Ireland (sports betting), Sweden, and Malta. The Maltese licence covers all .com markets. AG is in the process of applying for a sports betting licence in Germany. When an operator joins and uses AG’s Core platform, it is able to access all of the licences and therefore does not need to apply for its own licence in a country, which can be time consuming and expensive. In addition, the Core platform is certified in other regulated countries including the US, Mexico, Colombia, Portugal, and Russia so that operators with licences in those countries can take advantage of AG’s technological expertise.
* '''Solvency II and Capital Requirements''': As an insurer, Phoenix is subject to '''Solvency II''' regulations, which require insurers to hold a certain level of capital relative to their liabilities. Changes in these regulations or an increase in capital requirements could force Phoenix to retain more capital, reducing its flexibility and potentially impacting dividend payments.
* '''Pension and Insurance Regulation Changes''': Since Phoenix operates heavily in the '''pensions''' and '''retirement solutions''' sectors, any adverse changes in pension or tax legislation could impact demand for its products, profitability, and its Bulk Purchase Annuities (BPA) business.
* '''Climate and ESG Regulation''': Increasingly strict Environmental, Social, and Governance (ESG) requirements are pushing insurers to adjust investment portfolios to meet regulatory guidelines. Phoenix might need to divest from certain assets, which could reduce investment returns.


* Compliance and regulations: AG’s in-house regulation and compliance teams monitor all operations and keep up to date with changes in regulations to ensure the platform is compliant with all required laws and regulations. It also provides ongoing training, regulatory updates, and marketing guidelines to partners.
=== 2. '''Interest Rate and Investment Yield Risks''' ===


* Data analysis and intelligence: customers are provided with on-demand data analysis, business intelligence and analytical tools that enable them to monitor their own performance and help them maximise player profitability with the use of sensitivity analysis on customer acquisition costs and potential changes in marketing strategy.
* '''Low Yield Environment''': A substantial portion of Phoenix's revenues comes from the investment returns on its policyholder funds. In a low-interest-rate environment, the company may struggle to generate adequate returns on its investment portfolio, which can impact profitability and dividend payouts.
* '''Rising Interest Rates''': While rising interest rates might benefit Phoenix’s investment returns, they also increase discount rates, which can reduce the value of Phoenix's long-term liabilities, including its bulk purchase annuity (BPA) business. Higher rates can also reduce the value of the bond-heavy portfolios often held by insurers.
* '''Market Volatility''': A significant portion of Phoenix's assets is invested in '''fixed-income securities'''. Market volatility can cause fluctuations in the value of these investments, impacting the solvency position, especially if there’s a sudden downturn.


* CRM: AG believes its recently launched Aspire Engage is the most advanced CRM tool in the market. It allows operators to market to their players on any device in real time with relevant attractive promotions according to pre-defined segmentation. The CRM services offered include campaign management, player segmentation and retention analysis, tools to enhance customer conversion, the management of bonuses and promotions, and tools to manage responsible gaming.
=== 3. '''Longevity and Mortality Risk''' ===


* VIP management: AG’s most experienced employees work closely with the operators’ most valued customers to improve customer loyalty.
* '''Longevity Risk''': Phoenix bears longevity risk, as it is responsible for paying benefits as long as policyholders live. Longer life expectancies increase the liabilities on Phoenix’s books, potentially eroding profitability, particularly for its annuity and pension businesses.
* '''Mortality Risk''': Unforeseen mortality events (e.g., pandemics) could lead to higher-than-expected claims, increasing Phoenix's short-term liabilities and impacting its solvency position.


* Payment processing and risk management: AGs platform is integrated with a number of alternative payment providers and solutions, other than credit and debit cards, to provide seamless and safe management of player deposits and payouts. Alternate payment providers include Worldpay, PayPal and Adyen as well as local services including Trustly in Sweden, Neteller, Skrill and Paysafecard in the UK, and Giropay and Sofort in Germany. With respect to fraud management, the platform has quick Know Your Customer (KYC) processes and a highly secure fraud prevention scheme.
=== 4. '''Competition and Market Dynamics''' ===


* Customer support: AG provides unique tools for its operators/clients to communicate with their players. Those tools have real-time data so the information will be updated at all times.
* '''Intense Competition''': Phoenix faces competition from other insurers, especially in the bulk purchase annuity (BPA) market, where players like '''Legal & General''' and '''Aviva''' have strong market positions. Competition could impact Phoenix’s ability to acquire new business profitably.
* '''New Market Entrants''': As Phoenix expands into open-book insurance and retirement solutions, it faces competition from established life insurers and pension providers, which may make it difficult to gain significant market share in these areas.


Since the IPO in 2017, management has continued to invest in the platform to improve the speed, availability, and reliability of the underlying technology, as well to improve the breadth and quality of the services offered. In 2018, the platform moved from a pure casino focus to adding sports betting, with the aim of targeting new audiences and partners.
=== 5. '''Acquisition Integration and Execution Risks''' ===


The Core platform generates revenue from three sources:
* '''Dependence on Acquisitions''': Phoenix's growth strategy is heavily reliant on acquiring closed-book life insurance portfolios and expanding into BPAs. However, integrating these acquisitions can be complex and costly. Any difficulties in integrating new acquisitions could affect Phoenix’s operational efficiency and financial performance.
* '''Integration Challenges''': Acquisitions bring challenges, from technology integration to operational alignment. Phoenix’s success in generating returns relies on its ability to integrate and manage these new books effectively, which is not always guaranteed.


* Set-up fee: a fixed set-up fee is charged immediately after the signing of an agreement with a new client. In FY20, these represented less than 10% of AG’s Core revenue.
=== 6. '''Liquidity and Refinancing Risks''' ===


* Mark-up on supplier services: AG charges a moderate mark-up on charges for services provided by third parties such as fees of games providers and payments service providers. In FY20, mark-ups represented 15–20% of AG’s Core revenue.
* '''Debt Levels and Refinancing''': Phoenix Group uses debt financing to fund some of its acquisitions. If the cost of debt rises (e.g., due to increasing interest rates or a change in credit rating), it could increase financing costs and reduce cash available for dividends and expansion.
* '''Liquidity Constraints''': In a market downturn, Phoenix may need to access capital markets to fund operations or meet capital requirements. Limited access to liquidity or higher-than-expected costs could negatively impact Phoenix’s stability.


* Split of net gaming revenue (NGR): NGR is gross gaming revenue (ie total bets wagered by customers less their winnings) less any bonus and jackpot contributions. When a partner brand launches on AG’s platform they both share the NGR. To limit downside risk, a minimum platform fee is charged, which is automatically replaced by a share of revenue once it has been exceeded. In FY19, this represented more than three-quarters of AG’s Core revenue. Management believes its greater focus on a revenue share model than its peers aligns AG’s interests better with those of its customers.
=== 7. '''Reputation and Brand Risk''' ===


As AG is the licence holder, it receives the revenue direct from the players of the games and then distributes the partner’s share of NGR, which is recognised as a royalty payment within distribution costs. This is different from many peers that receive a fee for proving the platform.
* '''Customer Trust and Brand Value''': Phoenix relies on a strong brand, especially in retirement and pension solutions. Negative publicity or poor customer experience, especially following an acquisition, could erode brand trust and hinder its growth efforts.
* '''ESG and Social Responsibility''': As public and investor scrutiny of ESG practices grows, any misalignment or failure to meet ESG standards could damage Phoenix’s reputation and investor appeal.


Core’s financial performance
=== 8. '''Operational and Technological Risks''' ===


At 57% of group revenue (GGR) and 60% of group EBITDA in FY20 (56% and 57%, respectively on a pro forma basis), Core is AG’s most important segment from a financial perspective. Its GGR revenue has grown from €30.0m in FY16 to €92.7m in FY20, a CAGR of c 33%, during which time EBITDA increased from €7.2m to €16.1m, a CAGR of c 23%.
* '''Cybersecurity''': Phoenix holds vast amounts of sensitive policyholder information. Any breach could lead to financial losses, reputational damage, and regulatory scrutiny.
* '''Legacy System Management''': With Phoenix’s expansion through acquisitions, the company must integrate various IT and data systems effectively. Operational disruptions, system failures, or integration issues could impact service levels and increase operational costs.


Core’s revenue growth has been driven by increasing the number of clients and brands that use the platform, and the revenue earned from each. At the end of FY20, the platform had 42 clients and 86 brands versus 22 clients and 44 brands at the end of FY16. In our forecasts Edison Investment Research assumes the number of brands operating on the site increases by 4–5 pa, and average revenue per brand increases by 5% pa, resulting in c 10–11% organic revenue growth to €101.9m in FY21 and €112.9m in FY22.
== Valuation ==


The EBITDA margin has trended down from 23.9% in FY16 to 17.4% in FY20, due to management’s deliberate focus on increasing exposure to regulated markets, in which operating costs are higher and AG provides more favourable terms to clients in these markets versus unregulated markets. Despite having higher operating costs, increased regulation provides greater certainty about the operating environment for operators, excluding competition issues. Edison Investment Research assumes the EBITDA margin is stable versus FY20 in our forecast years, as management expects increased scale and greater automation to offset the ongoing shift to regulated markets.
=== Dividend Discount Model ===
To calculate the value of '''Phoenix Group''' using the '''Dividend Discount Model (DDM)''', we need to follow the basic formula for a '''Constant Growth Dividend Discount Model''':


===Games===
Value of the Stock (V)=r−gD1​​


AG’s Games business was formed on the acquisition of Pariplay, consolidated from 1 October 2019, for €13.3m. Pariplay operates a leading global game aggregator platform and develops its own proprietary online games. The acquisition was strategically important as it provided AG with access to an important part of the iGaming value chain, games creation and aggregation and, significantly, Pariplay gained an iGaming licence for New Jersey, which is crucial for AG to grow in the strategically important US market.
Where:


The attractiveness of Pariplay to online gaming operators is that as a hub, it provides fast and simple access to a vast collection of online games, increasing by 15–20 new titles per week, created by leading games creation companies.
* D1​ = the expected dividend in the next period (i.e., the next year).
* r = the required rate of return or cost of equity.
* g = the expected growth rate of dividends.


As Pariplay was integrated, it was expected to deliver both revenue synergies (cross-selling of AG’s and Pariplay’s games) and cost synergies (integration of platforms and back office, etc). At the time of the acquisition, Pariplay offered more than 2,000 games from over 30 vendors, as well as 56 proprietary games. The client base of c 60 operators included Svenska Spel, 888 Holdings.com, William Hill and Entain.
=== Step-by-Step Calculation ===


Management has focused on increasing the quality and quantity of the games offered, as well as improving functionality and features, so that Games has gained more customers in more geographies. By the end of FY20, the number of third-party games available had increased to more than 3,000 from 42 vendors including Evolution Gaming and Netent, and the number of proprietary games had increased to 113 following a steady release of six new games per quarter. New customers since acquisition include leading names such as BetVictor and bwin, and in more new countries such as Portugal, Romania, Switzerland, and the United States.
# '''Find Expected Dividend (D1​)'''
#* Let’s assume Phoenix’s expected dividend in the next period is '''£0.30 per share''' (this is an assumption, so you should replace it with actual forecast data if available).
# '''Cost of Equity (r)'''
#* From earlier, we estimated Phoenix's '''cost of equity''' (using CAPM) to be around '''8.9%'''.
# '''Dividend Growth Rate (g)'''
#* Phoenix’s dividends have been relatively stable, with moderate growth. Let’s assume an expected dividend growth rate of '''2%''' per year.


Operational focus has resulted in strong financial performance, with revenue and EBITDA at all-time highs in Q420. In FY20, revenue and EBITDA increased to €16.0m and €4.2m, growth of 52% and 144% respectively from FY19 pro forma revenue of €10.6m and EBITDA €1.7m. The EBITDA margin increased from 16.9% in Q419 to 26.8% in Q420, and from a pro forma FY19 margin of 16.2% to 26.0% in FY20, significantly higher than AG’s group average of 16.7%.
=== Putting it into the formula: ===
V=0.089−0.020.30​=0.0690.30​ V≈4.35


Using Pariplay’s FY19 pro forma results, the acquisition price of €13.3m represented an EV/sales multiple of 1.3x and EV/EBITDA of 7.8x. Strong financial performance in FY20 brought the multiples down to 0.8x and 3.2x, respectively.
=== Interpretation: ===
The value of Phoenix Group based on the '''DDM''' is approximately '''£4.35 per share''', assuming the expected dividend for the next year is £0.30, the cost of equity is 8.9%, and the growth rate of dividends is 2%.


===Sports===
=== Important Considerations: ===


The Sports sub-segment was formed on the acquisition of BtoBet, a leading sportsbook platform provider, from 1 October 2020. The company had c 100 employees, mainly based in Italy and North Macedonia.
* The accuracy of this model is highly dependent on the accuracy of the '''dividend forecast''', '''cost of equity''', and '''growth rate'''. Any changes to these assumptions would significantly affect the outcome.
* This model is most suitable for companies with '''stable and predictable dividend policies''', such as Phoenix Group, but it may not fully capture other aspects of value, such as potential capital gains or market changes.


The acquisition was strategically important as adding sportsbook technology meant that AG now has a presence in all the major areas of online gaming, and the presence in sports is important given its ambitions to grow in the US, which is expected to deliver significant growth in the future.
== Appendix ==


Following the acquisition, management indicated that its existing sportsbook business will be migrated to BtoBet, and that Pariplay’s games and aggregation could be offered to its clients.
=== Dividend ===
{| class="wikitable"
|+Dividends
!
!Interim
!Final
!Total
!Change (%)
|-
|2024
|0.2665
|
|0.2665
|
|-
|2023
|0.2600
|0.2665
|0.5265
|4%
|-
|2022
|0.2480
|0.2600
|0.5080
|4%
|-
|2021
|0.2410
|0.2480
|0.4890
|3%
|-
|2020
|0.2340
|0.2410
|0.4750
|1%
|-
|2019
|0.2340
|0.2340
|0.4680
|2%
|-
|2018
|0.2260
|0.2340
|0.4600
| -8%
|-
|2017
|0.2510
|0.2510
|0.5020
| -1%
|-
|2016
|0.2670
|0.2390
|0.5060
| -5%
|-
|2015
|0.2670
|0.2670
|0.5340
|0%
|-
|2014
|0.2670
|0.2670
|0.5340
|0%
|-
|2013
|0.2670
|0.2670
|0.5340
|12%
|-
|2012
|0.2100
|0.2670
|0.4770
|14%
|-
|2011
|0.2100
|0.2100
|0.4200
|0%
|-
|2010
|0.2100
|0.2100
|0.4200
|
|-
|2009
|
|0.1527
|0.1527
|
|}
{| class="wikitable"
|+Dividend
!
!Mean
!Median
!Mode
|-
|Since inception
|2%
|1%
|0%
|-
|Since the last five years
|3%
|3%
|#N/A
|-
|Since the last three years
|3%
|4%
|#N/A
|}


When the acquisition was announced, BtoBet had 32 operator clients in Europe, Latin America, and Africa, but with a greater presence in emerging markets than AG had historically. Under AG’s ownership, BtoBet has made an impressive start, launching six new partner brands, and signing five new partners in Q420. These included a partnership with Betfair in Colombia in October 2020. In November, it expanded into Russia by signing a platform deal with Russian National Lottery’s Operator Sports Lotteries, followed in December by a partnership with William Hill in Colombia.
===Economic links to cash flow patterns ===
{| class="wikitable"
|+Economic links to cash flow patterns
|-
!Cash flow type!!Introduction!!Growth!!Shake out!!Mature!!Decline
|-
|Operating|| style="background: red; color: white;" |-|| style="background: green; color: white;" |+
| style="background: orange; color: white;" | +/-|| style="background: green; color: white;" |+|| style="background: red; color: white;" |-
|-
|Investing|| style="background: red; color: white;" |-|| style="background: red; color: white;" |-|| style="background: orange; color: white;" |+/-|| style="background: red; color: white;" |-
| style="background: green; color: white;" | +
|-
|Financing|| style="background: green; color: white;" |+|| style="background: green; color: white;" |+|| style="background: orange; color: white;" |+/-|| style="background: red; color: white;" |-|| style="background: orange; color: white;" |+/-
|}


In FY20, Sports contributed revenue of €2.2m and EBITDA of €0.6m, an EBITDA margin of 29% during the final quarter. On a pro forma basis, FY20’s revenue of €6.8m and EBITDA of €2.1m represented growth of c 55% and c 39% from FY19’s €4.4m and €1.5m, respectively. With a higher EBITDA margin of 29.0% than the group average, its growth will help to boost AG’s overall EBITDA margin. Edison Investment Research forecasts that AG adds 20 new partners in FY21, which is consistent with the five new partners signed, six new partners launched in Q420, the first period of ownership, and a further 15 new partners in FY22 taking the total number of partners to 73 by the end of FY22. In addition, Edison Investment Research assumes 10% growth in revenue per partner in each year. These are estimated to produce revenue of €11.5m in FY21 and €15.9m in FY22. Following more stable margins in FY21 versus FY20 as the business invests, Edison Investment Research assumes good growth in margin to 35% in FY22 as the business benefits from better operational leverage.
=== Beta risk profile ===
{| class="wikitable"
|+
!Beta value
!Risk rating
|-
|style="background: green; color: white;" |0 to 0.50
|style="background: green; color: white;" | Low
|-
|style="background: orange; color: white;" | 0.50 to 1.50
|style="background: orange; color: white;" | Medium
|-
|style="background: red; color: white;" | 1.50 to 3.00
|style="background: red; color: white;" | High
|-
|style="background: purple; color: white;" | 3.00 and above
|style="background: purple; color: white;" | Extremely high
|}


The total consideration of €37.4m for BtoBet comprises initial cash of €15.8m, a deferred payment (after 12 months) of €4.7m and contingent consideration (two years after closing) of up to €16.9m. It represented an FY20 EV/sales multiple of 5.5x and EV/EBITD multiple of 17.9x.
=== Phoenix adjusted beta calculation ===
{| class="wikitable"
|+
!Date
!iShares MSCI World ETF unit price (USD)
!Phoenix share price (GBP)
!iShares MSCI World ETF unit price change (%)
!Phoenix share price change (%)
|-
|01/11/2019
|96.76
|745.50
|
|
|-
|01/12/2019
|98.78
|749.00
|2.09%
|0.47%
|-
|01/01/2020
|97.73
|758.00
| -1.06%
|1.20%
|-
|01/02/2020
|89.67
|691.20
| -8.25%
| -8.81%
|-
|01/03/2020
|77.93
|626.60
| -13.09%
| -9.35%
|-
|01/04/2020
|86.36
|601.00
|10.82%
| -4.09%
|-
|01/05/2020
|90.70
|616.20
|5.03%
|2.53%
|-
|01/06/2020
|92.14
|644.00
|1.59%
|4.51%
|-
|01/07/2020
|96.65
|658.60
|4.89%
|2.27%
|-
|01/08/2020
|102.96
|692.00
|6.53%
|5.07%
|-
|01/09/2020
|99.52
|688.20
| -3.34%
| -0.55%
|-
|01/10/2020
|96.53
|662.40
| -3.00%
| -3.75%
|-
|01/11/2020
|108.94
|716.80
|12.86%
|8.21%
|-
|01/12/2020
|112.41
|700.60
|3.19%
| -2.26%
|-
|01/01/2021
|111.49
|674.80
| -0.82%
| -3.68%
|-
|01/02/2021
|114.27
|710.00
|2.49%
|5.22%
|-
|01/03/2021
|118.49
|734.20
|3.69%
|3.41%
|-
|01/04/2021
|123.61
|711.40
|4.32%
| -3.11%
|-
|01/05/2021
|125.60
|735.60
|1.61%
|3.40%
|-
|01/06/2021
|126.57
|676.40
|0.77%
| -8.05%
|-
|01/07/2021
|128.83
|679.40
|1.79%
|0.44%
|-
|01/08/2021
|132.02
|623.40
|2.48%
| -8.24%
|-
|01/09/2021
|126.46
|645.60
| -4.21%
|3.56%
|-
|01/10/2021
|133.84
|656.60
|5.84%
|1.70%
|-
|01/11/2021
|131.10
|640.20
| -2.05%
| -2.50%
|-
|01/12/2021
|135.32
|653.20
|3.22%
|2.03%
|-
|01/01/2022
|128.32
|660.20
| -5.17%
|1.07%
|-
|01/02/2022
|124.58
|618.60
| -2.91%
| -6.30%
|-
|01/03/2022
|128.16
|614.00
|2.87%
| -0.74%
|-
|01/04/2022
|117.42
|609.00
| -8.38%
| -0.81%
|-
|01/05/2022
|117.94
|637.60
|0.44%
|4.70%
|-
|01/06/2022
|106.88
|590.40
| -9.38%
| -7.40%
|-
|01/07/2022
|115.57
|643.80
|8.13%
|9.04%
|-
|01/08/2022
|110.28
|602.40
| -4.58%
| -6.43%
|-
|01/09/2022
|99.95
|526.80
| -9.37%
| -12.55%
|-
|01/10/2022
|107.42
|542.40
|7.47%
|2.96%
|-
|01/11/2022
|115.44
|588.80
|7.47%
|8.55%
|-
|01/12/2022
|109.25
|608.60
| -5.36%
|3.36%
|-
|01/01/2023
|117.01
|640.80
|7.10%
|5.29%
|-
|01/02/2023
|113.98
|633.40
| -2.59%
| -1.15%
|-
|01/03/2023
|117.67
|546.40
|3.24%
| -13.74%
|-
|01/04/2023
|119.79
|591.80
|1.80%
|8.31%
|-
|01/05/2023
|118.60
|552.40
| -0.99%
| -6.66%
|-
|01/06/2023
|124.52
|531.80
|4.99%
| -3.73%
|-
|01/07/2023
|128.54
|550.20
|3.23%
|3.46%
|-
|01/08/2023
|125.70
|521.00
| -2.21%
| -5.31%
|-
|01/09/2023
|120.17
|482.20
| -4.40%
| -7.45%
|-
|01/10/2023
|117.11
|453.80
| -2.55%
| -5.89%
|-
|01/11/2023
|127.78
|465.20
|9.11%
|2.51%
|-
|01/12/2023
|133.02
|535.20
|4.10%
|15.05%
|-
|01/01/2024
|134.20
|505.40
|0.89%
| -5.57%
|-
|01/02/2024
|140.28
|497.30
|4.53%
| -1.60%
|-
|01/03/2024
|144.91
|552.60
|3.30%
|11.12%
|-
|01/04/2024
|139.17
|489.80
| -3.96%
| -11.36%
|-
|01/05/2024
|145.71
|496.20
|4.70%
|1.31%
|-
|01/06/2024
|147.49
|521.50
|1.22%
|5.10%
|-
|01/07/2024
|149.97
|547.00
|1.68%
|4.89%
|-
|01/08/2024
|154.18
|565.50
|2.81%
|3.38%
|-
|01/09/2024
|156.91
|559.50
|1.77%
| -1.06%
|-
|01/10/2024
|153.73
|491.20
| -2.03%
| -12.21%
|-
|01/11/2024
|160.13
|492.00
|4.16%
|0.16%
|}
{| class="wikitable"
|+Phoenix beta and adjusted beta value
!
!Value
!Comment(s)
|-
!Beta
|0.642647
|
|-
!Adjusted beta
|0.761765
|
|}


===B2C===
=== Cost of equity ===
 
{| class="wikitable"
The B2C segment includes AG’s proprietary online gaming sites, which it markets directly to online customers. The most notable brand is Karamba. The B2C brands use AG’s Core platform, and therefore benefit from the scale economies that B2B customers enjoy when they become a client. As well as providing profitable growth to AG, the business provides valuable insight into wider product development in iGaming.
|+Cost of equity (%)
 
!Input
The long-term growth strategy has been to enter new verticals and thus present the opportunity to attract new online customers.
!Input value
 
!Additional information
B2C’s revenue is the online game’s NGR. The B2C segment bears the expenses of marketing and customer acquisition. It also pays technology platform fees to AG’s Core.
|-
 
|Risk-free rate (%)
In March 2021, the company announced the segment is subject to a strategic review, with the aim of determining how best to accelerate growth. One possible outcome of the review is a disposal of the B2C segment.
|4.473%
 
|Here, the risk free rate is the US 30 year treasury bond, and is calculated as at 11th November 2024.<ref>https://www.marketwatch.com/investing/bond/tmubmusd30y?countrycode=bx</ref> Research suggests that for the risk-free rate, it's best to use one that has the same or similar maturity to the estimated remaining lifespan of the company. Here, we have assumed that the estimated lifespan of the company is 50 years, so we have used the longest maturity, which is 30 years.
B2C’s KPIs
|-
 
|Adjusted beta
Below Edison Investment Research highlights the annual and quarterly progression of four of B2C’s main KPIS, rebased to 100 in Q117 to aid comparability, and marketing expense relative to net gaming revenue (NGR).
|0.76
 
|Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta.
Since FY17, the number of active users has increased at a CAGR of c 10% from 138.1k to 182.9k at the end of FY20, having peaked at 197k at the end of FY19. The value of transactions has increased at a CAGR of 6%, from €1.18bn in FY17 to €1.41bn in FY20, peaking at €1.58bn in FY18, implying a lower average spend per new customer.
|-
 
|Equity risk premium (%)
Growth in FY18 was driven by more efficient marketing and CRM, as well as the launch of sportsbook ahead of the 2018 FIFA World Cup. In FY19, ongoing innovation and the entry into new markets was not enough to offset the tough comparative from the World Cup, and a change in regulations in the Netherlands and the UK in the fourth quarter which negatively affected growth. Regulatory changes continued to affect its growth into the start of FY20, before the beneficial effects on online gaming from COVID helped the business grow all KPIs y-o-y. Through FY20, there has been improving momentum, ie y-o-y growth in the value of transactions and the level of deposits, albeit with fewer active players but on an improving trend, implying greater spend per active customer, following significant investment in marketing in key regulated markets, the UK, Ireland, and Denmark.
|5.48%
 
|Here, the equity risk premium is in relation to the global region, and is calculated as at 1st July 2023.<ref>https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html</ref> Research suggests that for the region of equity risk premium, it's best to use one that is the same or similar to the region of the beta market portfolio. Here, the region of the beta market portfolio is the world/global, so we have used the world/global region for the equity risk premium.
B2C’s financial performance
|-
 
|Cost of equity (%)
In FY20, B2C represented 31% of group revenue (GGR) and 23% of group EBITDA, with an EBITDA margin of 12.1%.
|8.64%
 
|Cost of equity = Risk-free rate + Beta x Equity risk premium.
B2C’s revenue (GGR) has grown in every financial year since FY20 and net revenue, ie after VAT, has grown at a slightly lower CAGR of 12%, which reflects increasing exposure to regulated markets where taxes tend to be higher. In our forecasts Edison Investment Research assumes low single-digit growth for the number of active users and c 5% growth for average revenue per user, producing 7% growth in total. Our forecasts assume a stable EBITDA margin of 12.1%.
|}
 
==Online gaming markets<ref name=":0" />==
 
According to H2 Gambling Capital (H2GC), the online gaming regions in which AG currently has a presence, albeit some are in the early stages of development, are expected to grow GGR from c US$37.6bn in FY19 to US$69.1bn by 2025e.
 
Europe is forecast to still be the largest of the markets highlighted in the table above by 2025, growing by 54% from 2019, but the other less mature markets are expected to demonstrate faster growth rates, with the US increasing by c 370%, Latin America by c 110% and Africa by c 100%.
 
The move towards online gaming is driven by increasing wealth, internet and mobile penetration, product innovation and regulation.
 
Regulation varies by country, from markets where gambling is explicitly prohibited to government-owned monopolies, to licensed industries that are fully open to commercial operators. There are also many countries where governments are yet to legislate for online products and the regulatory picture in these markets remains ‘grey’.
 
AG expects its share of revenue from markets that are regulated to increase over time; its share of revenue from taxed, locally regulated or soon-to-be regulated markets has increased from 65% in FY16 to 71% in FY20.
 
As a market becomes regulated, typically the costs of operating in that market increase due to, for example tighter compliance requirements, greater controls on marketing and ensuring responsible gaming to protect the consumer. Use of AG’s platform or services helps customers mitigate these cost pressures. Management aims to have a presence in the majority of regulated markets through a combination of acquisitions and organic product investment.
 
==Management<ref name=":0" />==
 
AG’s executive team consists of seven members, including the CEO and CFO. The CEO reports directly to a five-member board. Many of the board are substantial shareholders.
 
'''Tsachi Maimon – CEO:''' Tsachi Maimon has been the CEO of AG since 2013 and a board member since 2015. He is also a board member of AG’s associate holdings NeoLotto, Minotauro and MarketPlay. Tsachi was previously head of casino at TNT Marketing, and a call centre manager at Cellcom, one of Israel’s largest telecom companies.
 
'''Motti Gil – CFO:''' Motti Gil has been CFO of AG since 2016 and the CO of Responsible Gaming since 2018. Prior to joining AG, Motti held senior roles at technology start-ups and public companies including CFO of GoNet Systems and VP of finance and CFO of IXI Mobile.
 
'''Carl Klingberg – chairman:''' Carl Klingberg has been chairman of the board of AG since 2017. He is also chairman of Mackmyra Svensk Whisky, Strömsta Säteri, DHS Venture Partners, Pay & Pray and Rotheca Invest and board member of Scandinavian WeldTech Holding. Carl’s prior roles include CEO of Scandinavia Online, SOL Content, MD of bwin Games, chairman of Heads Svenska and board member of Avanza Fondkomission.
 
'''Barak Matalon – founder of the company and board member:''' Barak Matalon has been a board member since 2005 and his other current roles include board member of NeoGames and AG’s associate, NeoLotto. His previous roles include VP of sales and marketing at NCP, the Israeli broadcasting channel and sales director at Internet Gold. Barak is AG’s largest shareholder.
 
'''Fredrik Burvall – board member:''' Fredrik Burvall has been on the board since 2017. Other current roles include chairman of Speqta and M.O.B.A Network, board member of Gambling.com Group and Enteractive and CEO and board member of The Networked Nation. Fredrik’s prior roles include CEO of Cherry and deputy board member of Bell Maritime Gaming.
 
'''Aharon Aran – board member:''' Aharon Aran has been a board member since 2018 and is currently CEO of the Israeli Audience Research Board, and a board member of NeoGames. Prior roles include CEO of TMF Media Group, Omnicom Media Group (Israel office), Schoken Group, Hadashot, VP of marketing of Elite Confectionery Group and EVP of Yedioth Ahronoth Media Group, Reshet TV- Ch.22 and TV Channel 10.
 
==Sensitivities<ref name=":0" />==
 
Edison Investment Research highlights below what it feels are the key sensitivities for AG’s businesses.
 
* Competition: the online gaming market, in which AG’s customers operate, is highly competitive and many markets are fragmented. AG’s revenue and profitability, due to its revenue-sharing business model, is closely aligned with the success of its customers. In addition, AG’s online B2B peers have greater scale with larger customer bases. These mean that AG needs to continue investing internally and externally.
 
* Gaming industry is highly regulated: the global gaming market is highly regulated and characterised by frequent changes. AG holds a number of licences that permit it to offer its services so AG must continue to fulfil the regulatory requirements of those licences and adapt to changes. As more markets become regulated, some clients may decide not to operate in a market due to the higher costs. As a result, AG’s revenue and profitability could be impaired by less favourable changes in regulation that affect its customers, or its growth prospects could be restricted by its inability to gain licences in new countries of interest.
 
* User preferences: AG is exposed to potential changes in user preferences in the online gaming industry, which is continuously evolving in terms of the games and activities offered, including due to regulatory changes that may permit new activities or restrict prior activities of the operators.
 
* Major shareholders and related parties: AG is majority owned by members of the supervisory board and other private investors, and although this certainly brings many benefits, it is important to note majority shareholders may not always have the same interests as outside investors. Major shareholders and related parties (NeoGames, which shares two board members with AG) have provided loan funding to the company as fully disclosed in the annual report and other financial releases. The receivable loan including accrued interest of c €14.5m is reported in non-current assets.
 
* M&A: the changing dynamics of the markets and the products and services required by customers could require further M&A to maintain or enhance AG’s market position. M&A activity has stepped up in the last two financial years with the acquisitions of Pariplay and BtoBet, which have initially generated strong growth and results following acquisition. Further M&A presents integration risk but management’s track record so far appears to have been good.
 
* Third-party service providers: the group relies heavily on its suppliers, including payment processing and technology infrastructure, so is vulnerable to disruption in these services.
 
* Dividend: since IPO, the company’s dividend policy has been to distribute annual dividends of at least 50% of net profit after taxes, subject to its capital requirements, impending financial liabilities, or commitment. Following a high payout ratio (c 129%) in FY17, the dividend payout ratio was c 26% for FY18 and zero for FY19 and FY20 as the company pursued M&A.
 
* Global shocks to demand such as pandemics: the underlying demand for online gaming can be affected by global demand, which can influence whether sporting events take place and how much time is spent online versus in physical locations such as casinos.
 
* Forex: most of AG’s operating costs are in euros but as it seeks to grow more globally, there may be an increasing currency mismatch between revenues and costs.
 
==Valuation<ref name=":0" />==
 
===Peer comparison===
 
In Exhibit 14 Edison Investment Research shows AG’s valuation relative to its peers, the quoted B2B gaming platform companies, which have a very wide range of multiples. Edison Investment Research would caution comparing the margins between the peers as the way AG discloses revenue may differ to the other companies. For peers Edison Investment Research calculates a simple average of the multiples and an average that excludes some peers that have much higher multiples, such as Bragg and Gan.
 
AG is trading at a significant discount to most of its peers when comparing all multiple-based valuation measures and it potentially offers a higher dividend yield than all of its peers if it resumes dividend payments from FY21, given an expected improved financial position. AG’s EV/EBIT multiple for FY21 of 10.2x is at a 63% discount to the adjusted average and its P/E of 11.3x is at a 74% discount to the adjusted average of 44.1x.
 
Relative to most of its peers, AG’s market capitalisation is smaller. However, as shown above, AG continues to scale up its business, including diversifying globally, through a combination of organic growth (new customers and spend per customer) and M&A. If AG continues to execute well and grow as management anticipates, Edison Investment Research would expect the valuation gap relative to its larger peers to narrow.
 
===DCF===
 
Edison Investment Research has also performed a DCF analysis with 5% annual revenue growth for three years beyond our explicit forecast period, followed by 2% annual growth thereafter. Edison Investment Research assumes a stable EBITDA margin beyond our forecast period of 18.8%. Using a WACC of 9.0% and terminal growth of 2% produces a value per share of SEK95. For FY21, our core DCF valuation of SEK95 would equate to an EV/EBIT multiple of 16.0x, P/E of 17.7x, and dividend yield of 2.0%, still comparing favourably with the above peers.
 
==Financials<ref name=":0" />==
 
===Income statement: Improving profitability===
 
Since FY16 AG’s revenue has grown from €61m to €161.9m, a CAGR of c 28%, translating to a CAGR for EBITDA of 24%, from €11.4m in FY16 to €27.1m in FY20. The EBITDA margin has reduced from 18.7% to 16.7%. In December 2018, management introduced long-term guidance for FY21 of revenue of €200m and EBITDA of €32m. At the time of the IPO, AG’s management introduced guidance for FY20 of €120m, which it exceeded more than a year ahead of schedule.
 
The key features of the income statement are:
 
* Revenue: our segmental forecasts above produce group revenue growth of 16% in FY21 to €187.7m and 13% to €211.3m in FY22. Our FY21 forecast is lower than management’s guidance set in December 2018 of €200.0m. Edison Investment Research expects Games and Sport to produce the highest rates of growth, with Games 23% and Sports c 68% (proforma).
 
* EBITDA: Edison Investment Research forecasts EBITDA of €32.8m in FY21 and €38.5m in FY22, growth of 15% on a pro forma basis in FY21 and 17% in FY22. Our forecast for EBITDA of €32.8m is greater than management’s guidance of €32.0m, as is the margin of 17.5% versus guidance of 16.0%. Edison Investment Research rationalises this by the recent acquisition of the higher-margin Games (26.0%) and Sports (29.0%) segments since management introduced its guidance. The cost drivers to the decline in group EBITDA margin have been the increase in distribution expenses relative to revenue offset by relative declines in admin. expenses and gaming duties. Distribution costs include the royalty payments, namely, the partners’ share of NGR of the Core segment and the marketing costs of the B2C segment. Distribution costs have increased due to management’s deliberate strategy to increase AG’s exposure to regulated and taxed markets, where operating costs are higher but more predictable, and it provides more favourable terms to partners than in non-regulated markets. Management is optimistic the continued focus on increasing exposure to regulated markets could be less of a drag on margins as increased scale following M&A and the introduction of more automated processes can offset the higher costs of regulated markets. Admin expenses include staff costs and professional expenses and have represented a good source of operational gearing and as AG grows this is likely to continue. In addition, gaming duties could increase relative to revenue given the greater exposure to regulated markets; however, the relative expense will depend on the mix and level of gaming duties in individual countries.
 
* Tax: AG’s effective group tax rate in FY20 was 8.5%, which Edison Investment Research assumes will continue in our forecast years and beyond. The Maltese corporate tax rate is 35%; however, according to the Maltese tax regime a material portion of tax is refundable, which reduces the Maltese effective rate to 5%, and the group rate to 8.5%.
 
* Associates: AG discloses its share of associate losses after tax, below profit after tax in the income statement. In our financial summary Edison Investment Research also highlights PBT with the inclusion of these operating losses. Edison Investment Research assumes a similar loss contribution of €2.0m from associates in FY21 before reducing to €1m in FY22.
 
* Dividend: Edison Investment Research assumes AG will return to paying a dividend with a gradual build in the payout ratio to 40% for FY21 and 50% for FY22, which compares with management’s stated policy of distributing at least 50% of net profit after taxes.
 
===Cash flow: Expecting higher cash flow generation===
 
Between FY16 and FY20, AG’s free cash flow CAGR was 16%, up from €10.5m to €18.9m. The strong operating cash flow CAGR of 21% has helped to fund greater internal investment to develop the platform and services.
 
Edison Investment Research forecasts relatively consistent operating and free cash flow generation in FY21 and FY22 mainly due to AG’s increasing profitability and the associated tax.
 
Working capital typically represents a positive inflow as customers are required to make deposits ahead of bets. FY19’s operating cash flow was negatively affected by a tax settlement with the Israeli tax authority with respect to jurisdiction and transfer pricing amongst the group entities for the period 2008–2018.
 
AG’s fixed capital intensity is low, with limited capex, whereas there has been a modest increase in the level of investment in intangibles, namely capitalised development costs, relative to revenue. In FY21, AG is due to make its first deferred payment for the acquisition of BtoBet of €4.7m.
 
===Balance sheet: Capital light and limited net debt===
 
AG has a robust balance sheet with a small net debt position of €5.2m at the end of FY20, excluding client cash (€6.0m) and IFRS 16 lease liabilities (€2.5m). Due to the nature of AG’s business and its recent acquisitions, the main non-current assets on the balance sheet are intangible assets (€38.5m) and goodwill (€28.9m), a total of €67.4m from a total asset base of €144.3m.
 
The other significant non-current asset is a related party loan from NeoGames, which shares two board directors with AG, that totalled €14.5m at the end of FY20. The loan could be worth up to €18.0m depending on exchange rates when it is due to be repaid to AG in March 2022, including the further interest accrual of €3.5m. Edison Investment Research conservatively, includes a lower estimated interest accrual of c €3m. When repaid, the funds will be used to replenish AG’s cash balances, which in the interim, along with one-year c €10m bridging loans from major shareholders, are funding the April 2021 €27.9m bond maturity.
 
The main current assets at the end of FY20 were cash €28.7m (including client cash of €6.0m, which Edison Investment Research excludes from our definition of AG’s cash position) and trade receivables of €13.2m, which are typically money owed by payment processors that remit funds to AG on behalf of the players.
 
At the end of FY20, the most significant near-term liability was the April 21 bond maturity and accrued interest of €27.9m, which is being funded as highlighted above. In addition, there was total deferred and contingent consideration for recent acquisitions with repayment dues of €4.8m in FY21 and €17.7m in FY23, shown in the cash flow above.
 
== References and notes ==
[[Category:Thesis]]
[[Category:Equities]]


== References ==
__INDEX__
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Revision as of 21:22, 11 November 2024

Phoenix Group Holdings is committed to helping people achieve a secure financial future, offering innovative retirement solutions and long-term savings products.

The company operates as a leading UK life and pensions provider, specialising in retirement solutions, long-term savings, and investment management. Phoenix prioritises the delivery of value-driven investments with a strong emphasis on environmental, social, and governance (ESG) principles, ensuring that its investment portfolios align with the evolving needs of its customers and society. Phoenix also focuses on managing long-term liabilities and capital efficiency, seeking to provide sustainable financial growth while supporting the retirement security of its policyholders.

Assuming Phoenix Group maintains a steady market position in the life insurance and pensions sectors, with modest growth in its asset management services, the expected return of an investment in the company over the next five years is positive 16%, which equates to an annual return of 3.1%. In other words, an £100,000 investment in Phoenix Group is expected to return £116,000 in five years' time.

The degree of risk associated with an investment in Phoenix Group is ‘moderate’, with the shares having a beta that is 22% below the market (0.78 vs. 1). Additionally, Phoenix Group’s shares show a ‘medium’ level of liquidity, as evidenced by its bid-ask margin of 0.02%.

Accordingly, based on the assumptions provided on the Stockhub platform, an investment in the company is considered to be a ‘suitable’ one for you if, among other criteria, your required:

  • Return level is 3.1% per year or more in absolute terms;
  • Risk level is 22% below the market risk level;
  • Time horizon is five years or longer;
  • Bid-ask margin is 0.02% or more; and/or
  • Objective is to invest in a stable, long-term provider of pensions and insurance solutions that aligns with responsible investment principles.

Fun fact: Phoenix Group Holdings was founded in 1782 and has grown into one of the UK’s largest providers of long-term savings and retirement solutions. It primarily focuses on closed life funds and the acquisition of life insurance businesses.

Operations

How did the idea of the company come about?

Phoenix Group Holdings was created with the aim of acquiring and managing closed life insurance and pension funds. Founded in 2009, it evolved from the Phoenix Assurance Company, which had traditionally provided life insurance. The modern group focused on acquiring legacy insurance portfolios—companies that no longer wrote new policies but still had substantial liabilities. By acquiring underperforming insurers, Phoenix aimed to improve efficiency, optimise capital, and unlock value from these closed books, growing into a major consolidator in the UK life insurance sector.

What's the mission of the company?

The mission of Phoenix Group Holdings is to deliver long-term value for its shareholders, policyholders, and other stakeholders by efficiently managing and growing closed life insurance and pension businesses. The company focuses on maximising the value of legacy insurance portfolios through operational improvements, capital optimisation, and the responsible management of policyholder liabilities. Their goal is to ensure financial security for policyholders while achieving sustainable, profitable growth for investors.

What are the main offerings of the company?

Phoenix Group Holdings primarily offers closed-book life insurance and pension solutions. Their key offerings include:

  1. Life Insurance: Managing legacy life insurance policies that are no longer open to new customers, focusing on optimising the value of existing portfolios.
  2. Pension Schemes: Overseeing pension funds and annuities for individuals and institutions, ensuring they are managed efficiently.
  3. Asset Management: The company offers investment management services for the assets backing its insurance and pension liabilities.
  4. Investment and Capital Management: Phoenix Group aims to enhance the value of its acquired portfolios through strategic capital management, risk optimisation, and operational efficiency.

These offerings are centered around managing closed insurance and pension books, with a focus on long-term value creation for policyholders and investors.

What makes the offerings unique?

What makes Phoenix Group Holdings' offerings unique is their focus on managing closed-book insurance and pension portfolios, businesses that no longer write new policies but still have significant liabilities. This specialisation is backed by key facts:

  1. Specialisation in Closed-Book Management: Phoenix Group is one of the largest consolidators of closed life insurance and pension books in the UK, managing over £300 billion in assets. It has acquired major portfolios, including from Standard Life (2018) and ReAssure (2020), demonstrating its leadership in this niche market.
  2. Operational Efficiency: Phoenix has a proven track record of improving operational performance. Following the Standard Life acquisition, the company implemented cost-saving measures that led to over £50 million in annual savings. Additionally, its £1 billion cost-saving program announced in 2020 highlights its focus on streamlining operations and improving efficiency across its legacy portfolio.
  3. Capital and Liability Optimisation: Phoenix utilises advanced capital management techniques, such as those seen in the £1.1 billion pension scheme buyout from Standard Life, which helped reduce risk and unlock value. The group also manages liabilities efficiently through Solvency II capital management, ensuring long-term sustainability and optimised returns.
  4. Focus on Long-Term Stability: Phoenix’s commitment to long-term financial security for policyholders is reflected in its 200% solvency ratio, well above regulatory requirements. The group also reported 9% growth in operating profit in 2023, alongside a consistent dividend track record, underscoring its ability to provide steady returns to shareholders while meeting policyholder obligations.

These factors combine to make Phoenix Group’s offerings distinct, focusing on operational efficiencies, capital optimisation, and long-term stability in the management of legacy insurance and pension portfolios.

From which place(s) are the offerings able to be purchased?

Phoenix Group's offerings are primarily available to existing policyholders and pension plan participants through their legacy insurance portfolios. Since the company focuses on managing closed books (policies no longer open for new customers), its products are not available for purchase by new clients. Instead, Phoenix manages and services existing life insurance and pension policies that were previously sold by acquired businesses.

Their offerings are available in the UK, where they have a significant presence, and the company’s services are accessible to policyholders through their digital platforms, customer service teams, and financial advisors. Additionally, Phoenix Group has operations in various European markets through acquired businesses. However, new policy purchases are not part of their current business model.

From which place(s) are the offerings promoted?

Phoenix Group's offerings are primarily promoted in the UK and Ireland, where it has a strong presence. The company's promotional efforts focus on:

  1. Existing Customers: Phoenix promotes its services and offerings to current policyholders through direct communications, customer support, and digital channels, emphasising the management of legacy insurance and pension portfolios.
  2. Investor Relations: Phoenix also promotes its financial products and services to investors, showcasing its strategy of acquiring and managing closed books, through annual reports, investor presentations, and shareholder updates.
  3. Acquired Businesses: The company may also promote its offerings indirectly through the brands of acquired insurers, such as Standard Life and Scottish Widows, which still serve policyholders under the Phoenix Group umbrella.
  4. Digital Platforms: Phoenix Group also uses its websites and digital platforms to communicate with both policyholders and investors, promoting its financial management strategies and policyholder services.

Overall, promotion is largely directed at existing stakeholders, given the closed-book nature of its business model.

What's the current strategy of the company?

Phoenix Group's current strategy focuses on sustainable growth, capital optimisation, and maximising the value of legacy insurance and pension portfolios. Key aspects of the strategy include:

  1. Acquisitions and Consolidation: Phoenix continues to grow by acquiring and managing closed-book life insurance and pension portfolios, enhancing its scale and operational efficiency. They focus on integrating acquired businesses, such as Standard Life, and improving their profitability.
  2. Operational Efficiency: The group aims to optimise its cost base, improve capital efficiency, and maximise returns from its existing portfolio of life insurance and pension policies. This includes enhancing digital services and improving customer experience for policyholders.
  3. Responsible Capital Management: Phoenix focuses on managing its capital efficiently to support growth and provide attractive returns to shareholders. This includes maintaining a strong balance sheet and ensuring adequate liquidity.
  4. Sustainability and Responsible Investment: The company is increasingly focused on aligning its operations with sustainable practices, including responsible investing, to meet evolving regulatory requirements and enhance long-term value.
  5. Customer-Centric Approach: While not writing new policies, Phoenix aims to deliver strong value for existing policyholders by managing their policies effectively, providing transparent communications, and focusing on delivering on the promises made to them.

Overall, Phoenix Group's strategy is centered around strengthening its position as a leading consolidator of closed life and pension books, while ensuring long-term growth and value creation for both policyholders and investors.

Competition

Phoenix Group, as a leading life insurance and pension provider primarily focused on managing closed insurance books and pensions in the UK, faces competition from companies with similar business models or overlapping areas in insurance, asset management, and retirement solutions. Key competitors include:

  1. Legal & General Group (L&G): L&G competes with Phoenix in life insurance, pensions, and retirement products. It also has significant expertise in asset management and bulk annuities, making it a major player in managing large pension schemes.
  2. Aviva: Aviva is another significant UK-based competitor in life insurance and pensions. Aviva provides services in retirement planning, life insurance, and asset management. Its focus on digital transformation and customer engagement is a strategic advantage.
  3. Swiss Re (ReAssure): Phoenix acquired ReAssure from Swiss Re in 2020, a move that underscored the competitive landscape in closed life books. Swiss Re remains an indirect competitor, as it focuses on reinsurance and has relationships with other UK life insurers and closed-book specialists.
  4. Standard Life (part of Phoenix) and Scottish Widows (Lloyds Banking Group): Scottish Widows competes in the pensions and life insurance markets. It also provides pension de-risking solutions and bulk annuity products, similar to Phoenix’s focus, especially through Standard Life.
  5. M&G plc: M&G combines asset management with pension solutions and life insurance products. As an investment manager, it competes with Phoenix in asset management and pension scheme management. Its pension expertise is a key overlap with Phoenix’s retirement-focused services.
  6. Rothesay Life: Rothesay Life is a specialist insurer focusing on bulk annuities and pension de-risking solutions. It’s a major player in managing pension liabilities, directly competing with Phoenix in acquiring large closed pension books.

Phoenix Group's core strategy centers around closed book acquisitions, bulk annuities, and retirement-focused services, which makes companies specialising in managing long-term pension liabilities and closed books its closest competitors. Additionally, the push toward digital transformation, asset management capabilities, and pension de-risking solutions is common among these firms, placing them in a tight competitive landscape.

Market

To understand Phoenix Group’s market opportunity, let’s look at its Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM), specifically in the context of its primary business lines, which include closed-book life insurance, open-book insurance, Bulk Purchase Annuities (BPAs), and retirement solutions.

1. Total Addressable Market (TAM)

  • Definition: The TAM is the total revenue opportunity available if Phoenix Group could achieve 100% market share in all its target sectors.
  • Market Size: The TAM for Phoenix includes:
    • The global life insurance market, especially in regions with significant closed-book insurance business (UK, Europe, some parts of North America).
    • The global pension market, as companies seek to offload pension liabilities via Bulk Purchase Annuities (BPAs).
    • The global retirement solutions and wealth management market, given the increasing demand for retirement products as populations age.
  • Estimated TAM: For Phoenix, the TAM is likely in the trillions in GBP, as the global life insurance market alone is estimated to be worth several trillion dollars annually. However, for closed-book management and pension buyouts specifically, estimates suggest an addressable market in the hundreds of billions, particularly in Europe and North America, where regulatory and aging demographics drive demand.

2. Serviceable Available Market (SAM)

  • Definition: The SAM represents the portion of the TAM that Phoenix Group could realistically service, given its specific focus and operational capabilities.
  • Market Focus:
    • UK and European Closed-Book Life Insurance: Phoenix Group is one of the largest consolidators of closed-book policies in the UK and Europe. The closed-book market in Europe alone is estimated to hold £300 billion to £400 billion in assets under management.
    • Bulk Purchase Annuities (BPA): In the UK, the BPA market has seen significant growth, with estimates suggesting it’s worth around £30 billion annually. As more companies offload pension liabilities, this market is expected to grow.
    • UK Retirement and Wealth Solutions: Given its acquisition of Standard Life and expansion into the open-book market, Phoenix can also tap into the retirement solutions market, worth an estimated £1 trillion in the UK alone.
  • Estimated SAM: For Phoenix, the SAM is likely in the hundreds of billions of pounds, focusing primarily on the UK and European closed-book life insurance market, BPAs, and retirement solutions.

3. Serviceable Obtainable Market (SOM)

  • Definition: The SOM is the portion of the SAM that Phoenix Group can realistically capture, given competition, regulatory constraints, and its existing market share.
  • Competitive Position:
    • Closed-Book Consolidation: Phoenix already holds a significant market share in the UK closed-book insurance market. Its scale, expertise, and established relationships position it to capture a substantial portion of this market. Realistically, Phoenix could maintain a 10-20% share of the UK and European closed-book market, equating to £30-60 billion.
    • BPAs: Phoenix is actively growing its presence in the BPA market. Given competition from other insurers like Legal & General, Phoenix might capture 5-10% of the BPA market, which could mean around £1.5-3 billion annually.
    • Retirement and Wealth Solutions: This is a competitive market with players like Aviva, Prudential, and Standard Life. Phoenix’s SOM here could be around 5%, or £50 billion, within the UK retirement solutions market.
  • Estimated SOM: Combining these factors, Phoenix’s SOM might realistically be between £80 billion to £120 billion across its primary markets. This includes substantial market share in closed-book management, a growing foothold in BPAs, and a smaller but strategic presence in retirement solutions.

Summary of TAM, SAM, and SOM for Phoenix Group:

Metric Market Size Key Focus Areas
TAM (Total Addressable Market) £1+ trillion Global life insurance, pensions, retirement solutions
SAM (Serviceable Available Market) £200-400 billion UK and European closed-book, BPAs, UK retirement solutions
SOM (Serviceable Obtainable Market) £80-120 billion UK and European closed-book, BPAs, retirement solutions in the UK

Phoenix’s strengths in closed-book consolidation, its expanding BPA business, and retirement solutions provide it with a substantial and accessible market within the broader insurance and retirement sector. This focus allows it to capitalise on predictable cash flows from closed books and emerging opportunities in BPAs, while building a foothold in the growing retirement market.

Team

As of 2024, the key members of the leadership team at Phoenix Group Holdings include:

Andy Briggs – Group Chief Executive Officer

Andy Briggs has been the CEO of Phoenix Group since 2015 and leads the company's strategic direction, focusing on growth through acquisitions and operational efficiency.

Clare Bousfield – Group Chief Financial Officer

Clare Bousfield oversees financial strategy, capital management, and reporting, ensuring the group's financial health and sustainable growth.

Keith Skeoch – Chairman

Keith Skeoch is the Chairman of Phoenix Group and has significant experience in financial services. He provides leadership and governance to the board.

Ian McKenna – Chief Risk Officer

Ian McKenna is responsible for overseeing risk management at Phoenix Group, ensuring that operational, financial, and regulatory risks are effectively managed.

Paul Brewer – Chief Operating Officer

Paul Brewer manages the operational aspects of Phoenix Group, including business integration from acquisitions and optimising customer service.

The leadership team is supported by various senior managers responsible for specific business areas such as investments, legal and compliance, and technology.

Risks

As with any investment, investing in Phoenix Group Holdings carries a level of risk. Overall, based on the Phoenix Group Holdings' adjusted beta (i.e. 0.76), the degree of risk associated with an investment in Phoenix Group Holdings is 'medium'.

Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of between 0.50 and 1.00. Further information about the beta ratings can be found in the appendix section of this report.

The key risks can be found below. For us, currently, the biggest risk to the valuation of the company relates to interest rate volatility (i.e. interest rate risk).

1. Regulatory and Legislative Risks

  • Solvency II and Capital Requirements: As an insurer, Phoenix is subject to Solvency II regulations, which require insurers to hold a certain level of capital relative to their liabilities. Changes in these regulations or an increase in capital requirements could force Phoenix to retain more capital, reducing its flexibility and potentially impacting dividend payments.
  • Pension and Insurance Regulation Changes: Since Phoenix operates heavily in the pensions and retirement solutions sectors, any adverse changes in pension or tax legislation could impact demand for its products, profitability, and its Bulk Purchase Annuities (BPA) business.
  • Climate and ESG Regulation: Increasingly strict Environmental, Social, and Governance (ESG) requirements are pushing insurers to adjust investment portfolios to meet regulatory guidelines. Phoenix might need to divest from certain assets, which could reduce investment returns.

2. Interest Rate and Investment Yield Risks

  • Low Yield Environment: A substantial portion of Phoenix's revenues comes from the investment returns on its policyholder funds. In a low-interest-rate environment, the company may struggle to generate adequate returns on its investment portfolio, which can impact profitability and dividend payouts.
  • Rising Interest Rates: While rising interest rates might benefit Phoenix’s investment returns, they also increase discount rates, which can reduce the value of Phoenix's long-term liabilities, including its bulk purchase annuity (BPA) business. Higher rates can also reduce the value of the bond-heavy portfolios often held by insurers.
  • Market Volatility: A significant portion of Phoenix's assets is invested in fixed-income securities. Market volatility can cause fluctuations in the value of these investments, impacting the solvency position, especially if there’s a sudden downturn.

3. Longevity and Mortality Risk

  • Longevity Risk: Phoenix bears longevity risk, as it is responsible for paying benefits as long as policyholders live. Longer life expectancies increase the liabilities on Phoenix’s books, potentially eroding profitability, particularly for its annuity and pension businesses.
  • Mortality Risk: Unforeseen mortality events (e.g., pandemics) could lead to higher-than-expected claims, increasing Phoenix's short-term liabilities and impacting its solvency position.

4. Competition and Market Dynamics

  • Intense Competition: Phoenix faces competition from other insurers, especially in the bulk purchase annuity (BPA) market, where players like Legal & General and Aviva have strong market positions. Competition could impact Phoenix’s ability to acquire new business profitably.
  • New Market Entrants: As Phoenix expands into open-book insurance and retirement solutions, it faces competition from established life insurers and pension providers, which may make it difficult to gain significant market share in these areas.

5. Acquisition Integration and Execution Risks

  • Dependence on Acquisitions: Phoenix's growth strategy is heavily reliant on acquiring closed-book life insurance portfolios and expanding into BPAs. However, integrating these acquisitions can be complex and costly. Any difficulties in integrating new acquisitions could affect Phoenix’s operational efficiency and financial performance.
  • Integration Challenges: Acquisitions bring challenges, from technology integration to operational alignment. Phoenix’s success in generating returns relies on its ability to integrate and manage these new books effectively, which is not always guaranteed.

6. Liquidity and Refinancing Risks

  • Debt Levels and Refinancing: Phoenix Group uses debt financing to fund some of its acquisitions. If the cost of debt rises (e.g., due to increasing interest rates or a change in credit rating), it could increase financing costs and reduce cash available for dividends and expansion.
  • Liquidity Constraints: In a market downturn, Phoenix may need to access capital markets to fund operations or meet capital requirements. Limited access to liquidity or higher-than-expected costs could negatively impact Phoenix’s stability.

7. Reputation and Brand Risk

  • Customer Trust and Brand Value: Phoenix relies on a strong brand, especially in retirement and pension solutions. Negative publicity or poor customer experience, especially following an acquisition, could erode brand trust and hinder its growth efforts.
  • ESG and Social Responsibility: As public and investor scrutiny of ESG practices grows, any misalignment or failure to meet ESG standards could damage Phoenix’s reputation and investor appeal.

8. Operational and Technological Risks

  • Cybersecurity: Phoenix holds vast amounts of sensitive policyholder information. Any breach could lead to financial losses, reputational damage, and regulatory scrutiny.
  • Legacy System Management: With Phoenix’s expansion through acquisitions, the company must integrate various IT and data systems effectively. Operational disruptions, system failures, or integration issues could impact service levels and increase operational costs.

Valuation

Dividend Discount Model

To calculate the value of Phoenix Group using the Dividend Discount Model (DDM), we need to follow the basic formula for a Constant Growth Dividend Discount Model:

Value of the Stock (V)=r−gD1​​

Where:

  • D1​ = the expected dividend in the next period (i.e., the next year).
  • r = the required rate of return or cost of equity.
  • g = the expected growth rate of dividends.

Step-by-Step Calculation

  1. Find Expected Dividend (D1​)
    • Let’s assume Phoenix’s expected dividend in the next period is £0.30 per share (this is an assumption, so you should replace it with actual forecast data if available).
  2. Cost of Equity (r)
    • From earlier, we estimated Phoenix's cost of equity (using CAPM) to be around 8.9%.
  3. Dividend Growth Rate (g)
    • Phoenix’s dividends have been relatively stable, with moderate growth. Let’s assume an expected dividend growth rate of 2% per year.

Putting it into the formula:

V=0.089−0.020.30​=0.0690.30​ V≈4.35

Interpretation:

The value of Phoenix Group based on the DDM is approximately £4.35 per share, assuming the expected dividend for the next year is £0.30, the cost of equity is 8.9%, and the growth rate of dividends is 2%.

Important Considerations:

  • The accuracy of this model is highly dependent on the accuracy of the dividend forecast, cost of equity, and growth rate. Any changes to these assumptions would significantly affect the outcome.
  • This model is most suitable for companies with stable and predictable dividend policies, such as Phoenix Group, but it may not fully capture other aspects of value, such as potential capital gains or market changes.

Appendix

Dividend

Dividends
Interim Final Total Change (%)
2024 0.2665 0.2665
2023 0.2600 0.2665 0.5265 4%
2022 0.2480 0.2600 0.5080 4%
2021 0.2410 0.2480 0.4890 3%
2020 0.2340 0.2410 0.4750 1%
2019 0.2340 0.2340 0.4680 2%
2018 0.2260 0.2340 0.4600 -8%
2017 0.2510 0.2510 0.5020 -1%
2016 0.2670 0.2390 0.5060 -5%
2015 0.2670 0.2670 0.5340 0%
2014 0.2670 0.2670 0.5340 0%
2013 0.2670 0.2670 0.5340 12%
2012 0.2100 0.2670 0.4770 14%
2011 0.2100 0.2100 0.4200 0%
2010 0.2100 0.2100 0.4200
2009 0.1527 0.1527
Dividend
Mean Median Mode
Since inception 2% 1% 0%
Since the last five years 3% 3% #N/A
Since the last three years 3% 4% #N/A

Economic links to cash flow patterns

Economic links to cash flow patterns
Cash flow type Introduction Growth Shake out Mature Decline
Operating - + +/- + -
Investing - - +/- - +
Financing + + +/- - +/-

Beta risk profile

Beta value Risk rating
0 to 0.50 Low
0.50 to 1.50 Medium
1.50 to 3.00 High
3.00 and above Extremely high

Phoenix adjusted beta calculation

Date iShares MSCI World ETF unit price (USD) Phoenix share price (GBP) iShares MSCI World ETF unit price change (%) Phoenix share price change (%)
01/11/2019 96.76 745.50
01/12/2019 98.78 749.00 2.09% 0.47%
01/01/2020 97.73 758.00 -1.06% 1.20%
01/02/2020 89.67 691.20 -8.25% -8.81%
01/03/2020 77.93 626.60 -13.09% -9.35%
01/04/2020 86.36 601.00 10.82% -4.09%
01/05/2020 90.70 616.20 5.03% 2.53%
01/06/2020 92.14 644.00 1.59% 4.51%
01/07/2020 96.65 658.60 4.89% 2.27%
01/08/2020 102.96 692.00 6.53% 5.07%
01/09/2020 99.52 688.20 -3.34% -0.55%
01/10/2020 96.53 662.40 -3.00% -3.75%
01/11/2020 108.94 716.80 12.86% 8.21%
01/12/2020 112.41 700.60 3.19% -2.26%
01/01/2021 111.49 674.80 -0.82% -3.68%
01/02/2021 114.27 710.00 2.49% 5.22%
01/03/2021 118.49 734.20 3.69% 3.41%
01/04/2021 123.61 711.40 4.32% -3.11%
01/05/2021 125.60 735.60 1.61% 3.40%
01/06/2021 126.57 676.40 0.77% -8.05%
01/07/2021 128.83 679.40 1.79% 0.44%
01/08/2021 132.02 623.40 2.48% -8.24%
01/09/2021 126.46 645.60 -4.21% 3.56%
01/10/2021 133.84 656.60 5.84% 1.70%
01/11/2021 131.10 640.20 -2.05% -2.50%
01/12/2021 135.32 653.20 3.22% 2.03%
01/01/2022 128.32 660.20 -5.17% 1.07%
01/02/2022 124.58 618.60 -2.91% -6.30%
01/03/2022 128.16 614.00 2.87% -0.74%
01/04/2022 117.42 609.00 -8.38% -0.81%
01/05/2022 117.94 637.60 0.44% 4.70%
01/06/2022 106.88 590.40 -9.38% -7.40%
01/07/2022 115.57 643.80 8.13% 9.04%
01/08/2022 110.28 602.40 -4.58% -6.43%
01/09/2022 99.95 526.80 -9.37% -12.55%
01/10/2022 107.42 542.40 7.47% 2.96%
01/11/2022 115.44 588.80 7.47% 8.55%
01/12/2022 109.25 608.60 -5.36% 3.36%
01/01/2023 117.01 640.80 7.10% 5.29%
01/02/2023 113.98 633.40 -2.59% -1.15%
01/03/2023 117.67 546.40 3.24% -13.74%
01/04/2023 119.79 591.80 1.80% 8.31%
01/05/2023 118.60 552.40 -0.99% -6.66%
01/06/2023 124.52 531.80 4.99% -3.73%
01/07/2023 128.54 550.20 3.23% 3.46%
01/08/2023 125.70 521.00 -2.21% -5.31%
01/09/2023 120.17 482.20 -4.40% -7.45%
01/10/2023 117.11 453.80 -2.55% -5.89%
01/11/2023 127.78 465.20 9.11% 2.51%
01/12/2023 133.02 535.20 4.10% 15.05%
01/01/2024 134.20 505.40 0.89% -5.57%
01/02/2024 140.28 497.30 4.53% -1.60%
01/03/2024 144.91 552.60 3.30% 11.12%
01/04/2024 139.17 489.80 -3.96% -11.36%
01/05/2024 145.71 496.20 4.70% 1.31%
01/06/2024 147.49 521.50 1.22% 5.10%
01/07/2024 149.97 547.00 1.68% 4.89%
01/08/2024 154.18 565.50 2.81% 3.38%
01/09/2024 156.91 559.50 1.77% -1.06%
01/10/2024 153.73 491.20 -2.03% -12.21%
01/11/2024 160.13 492.00 4.16% 0.16%
Phoenix beta and adjusted beta value
Value Comment(s)
Beta 0.642647
Adjusted beta 0.761765

Cost of equity

Cost of equity (%)
Input Input value Additional information
Risk-free rate (%) 4.473% Here, the risk free rate is the US 30 year treasury bond, and is calculated as at 11th November 2024.[1] Research suggests that for the risk-free rate, it's best to use one that has the same or similar maturity to the estimated remaining lifespan of the company. Here, we have assumed that the estimated lifespan of the company is 50 years, so we have used the longest maturity, which is 30 years.
Adjusted beta 0.76 Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta.
Equity risk premium (%) 5.48% Here, the equity risk premium is in relation to the global region, and is calculated as at 1st July 2023.[2] Research suggests that for the region of equity risk premium, it's best to use one that is the same or similar to the region of the beta market portfolio. Here, the region of the beta market portfolio is the world/global, so we have used the world/global region for the equity risk premium.
Cost of equity (%) 8.64% Cost of equity = Risk-free rate + Beta x Equity risk premium.

References

  1. ↑ https://www.marketwatch.com/investing/bond/tmubmusd30y?countrycode=bx
  2. ↑ https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html
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