Clive Cowdery, the “zombie fund” insurance guru who made £150 million by selling Resolution Life to Pearl last year, is under investigation by the ­Financial Services Authority (FSA).

A terse statement from Resolution revealed today that Cowdery and the rest of the board were being probed by the regulator over the £5 billion deal that saw Hugh Osmond's Pearl group acquire assets that have since fallen in value because of the turmoil in the insurance sector.

Details of the investigation are unclear — a spokesman for Resolution said it was not possible to elaborate.

Reached at his home, Cowdery said: “I cannot help you with that.”

City sources say the investigation relates to how Resolution was trading at the time of the share sale.

The Resolution statement said: “All parties understand the FSA's requirement to investigate allegations that it receives.”

The others under investigation are Mike Biggs, Ian Maidens, Jim Newman and Brendan Meehan.

All were on the board of the company sold to Pearl and are now part of the new company of the same name that Cowdery set up to acquire struggling financial firms.

Cowdery insists that the FSA investigation will not hinder his plans, but it won't be possible for him to do any deals until he has cleared his name.

“They are obliged to run a process and it is important that they are seen to do so. We are not concerned about any impact,” he said.

Resolution shares tumbled 113/4p to 95p on the news.

John Tiner, the former FSA boss who has since become chief executive of Resolution, is not part of the probe, which is focused on the period between October 2007 and May 2008.

During this time, Resolution unveiled an all-share merger with Friends Provident, then faced a counterbid from Standard Life, before finally agreeing to the 720p-a-share all-cash deal with Pearl, which had help from Royal London.

Osmond, who founded Pearl, and Cowdery are regarded as fierce rivals.

Each has made fortunes — Osmond from pubs and Cowdery from acquiring life insurance assets and closing them to new business. The firms they run are sometimes describ ed as vulture funds that manage “zombie” assets, though neither is fond of such portrayals.

With insurance assets collapsing in value and talk growing that some large players may need to be rescued, Osmond's deal looks to have been ill-timed.

The assets he acquired include those of the old Britannic Group and the UK life businesses of Swiss Life, Abbey National and Royal & SunAlliance. The funds were once worth £85 billion.

Osmond criticised the Friends Provident deal as failing to offer good value for shareholders. Once he beat Standard Life to the prize, he said the Pearl deal heralded a “bright future for policyholders, shareholders and employees”.

Cowdery started Resolution with a £500,000 loan. The former insurance broker had long regarded the industry as bloated and inefficient.

He believed that by acquiring funds of distressed firms, closing them to new business and injecting fresh fund management expertise, he could improve returns to policyholders and make a good return for investors.