Shares in financial buyout firm Resolution traded 15 per cent above their issue price on their first day of unconditional trading, as investors eyed restructuring opportunities in the financial sector.

Resolution, which takes in elements of the old Birmingham-based Britannic, raised £600million last week in London’s fourth-largest listing this year.

The company, founded by entrepreneur Clive Cowdery, is looking for acquisition targets in insurance and asset management in a range of £3billion to £5billion, to generate an internal rate of return in the mid-teens. UK insurers trade at an average price to embedded value ratio of 57 per cent, compared with the 85 per cent in April 2003, according to research by Nomura.

Insurance has underperformed the benchmark FTSE 100 index more than 30 per cent since the end of June amid fears losses on investments will force them to raise fresh capital.

Analysts expect UK banking groups to seek to raise funds by selling insurance and asset management operations. City watchdog the Financial Services Authority has ruled non-banking subsidiaries cannot contribute to banks’ tier 1 and tier 2 capital ratios. Resolution, advised by Lazard, sold its shares at 100p. The placement was arranged by Citi, HSBC and Merrill Lynch.