The US private equity titan has bought a life business which, among other services, provides wealth management products for high net worth individuals in different jurisdictions.

Lombard International Assurance, the firm that provides services such as wealth management products, announced today that its parent, UK-based Friends Life Group, has agreed to sell the business to US private equity firm Blackstone for €399 million ($542.7 million). The sale follows media speculation earlier this year that a deal was in the works.

The  sale is subject to regulatory approvals and completion is expected in the second half of 2014.

“Blackstone is a leading global investment and advisory firm with more than 25 years’ experience. It is one of the strongest global alternative asset managers, with a balanced mix of businesses and total assets under management of $272 billion as at 31 March 2014,” Lombard said in its statement today.

“We are excited to be investing in the leading pan-European unit linked life insurance company. Lombard International Assurance’s compelling value proposition to policyholders, dedication to distribution partners and strong management and employee team have created a unique franchise. We are committed to the company's long-term growth strategy,” Menes Chee, managing director at Blackstone, said.

The Lombard business focuses on areas such as wealth planning solutions for ultra high net worth individuals, in areas such as private placement life insurance, an area of continued growth and development in the wealth management sector. As explained on its website, the business “pioneered private bancassurance solutions that use life assurance as a sophisticated financial planning tool incorporating the invaluable benefit of Luxembourg’s solid insurance policyholder protection regime”. The business doesn’t directly market to end-clients but works with private banks and other intermediaries.

In certain markets, such as in Hong Kong, the market for wealth management-orientated products by insurers has been expanding, albeit not at an even pace, firms have said.

(Editor’s comment: A sale represents a focus on “core” activities by Friends Life and suggests that the business of running wealth structuring and related services to UHNW individuals may not be lucrative enough to justify its place in the stable. The Luxembourg-based business, and its rivals, is part of an interesting – and sometimes under-appreciated – part of the wealth management ecosphere. At a recent conference in London, I was told that the wealth structuring capacity of life insurance needs to flagged up more and given more of a profile. There are several firms in this sector, such as Swiss Life.)