
Pension buyout capital floods in
Two groups of ex-employees from annuities giant Prudential are leading the pack to take a slice of the potential £1,000 billion UK corporate buyout market. Prompted by the increasing demands of the UK's Pension Protection Fund (PPF) and Pensions Regulator, along with demographic change, many companies are looking for a way out of their defined benefit pension liabilities. Mark Wood, the former head of Prudential's UK operations, has secured £500 million of financing for his bulk purchase annuity vehicle Paternoster from a group of backers led by Deutsche Bank and Eton Park International. He says he will aim for a steady volume of small and medium-sized pension scheme buyouts With the first hurdle of financing successfully overcome, Paternoster is now looking to get approval from the UK's Financial Services Authority (FSA) for a licence to operate as an insurance company. This move is expected by mid-2006 and is not likely to be hampered by the appointment last month of the former head of the FSA, Sir Howard Davies to the board of Paternoster. Meanwhile, three of Wood's former Prudential colleagues, led by Isabel Hudson have backing for their pension buyout venture, Synesis Life. The capital backing, the amount of which has not been disclosed, will be provided by JP Morgan, the Royal Bank of Scotland and Warburg Pincus as part of a strategy to target up to £10 billion of liabilities over the medium term. Unlike Paternoster, Synesis will focus on the larger pension schemes. According to Hudson, the company, which has applied for an FSA licence, will outsource its actuarial function to consulting firm Watson Wyatt, appointing Nick Dumbreck as chief actuary. Watson Wyatt is also a leading actuarial and investment consultant for UK pension schemes. Another player in the market is an - as yet unnamed - company set-up by Edmund Truell, the founder of Duke Street Capital has apparently secured £400 million of capital and has appointed Lord Rothschild and the former head of the Inland Revenue, Sir Nicholas Montagu, as non-executive directors. It is not only start-up companies that are looking at the UK's corporate buyout market - earlier this year insurance giant Aviva said it was considering entering the sector. |
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Insurance
The future of life insurance
As the world constantly evolves and changes, so too does the life insurance industry, which is preparing for a multitude of challenges, particularly in three areas: interest rates, regulatory mandates and technology (software, underwriting tools and…
40% of insurers fail to specify climate as a key risk – LCP
Despite regulators’ urging, many UK and Irish insurers omit climate from risk statements, says report
Libor leaders: Prudential takes SOFR for a test drive
Test trades have allowed US insurer to start getting used to a life without Libor
Fed to push ahead with capital regime for single US insurer
Prudential faces risk capital add-ons unless it sheds “systemically important” label
Brexit dims hopes for Solvency II change in UK
Lawyers say political tensions may have killed off chance of reform, following PRA U-turn
BoE creates volatility adjustment ‘stepping stone’ for insurers
Dynamic VA may be used for assets that fail to qualify for matching adjustment, say experts
No plans to scrap systemic insurer rules, says IAIS chair
A US regulator claims Europeans asked IAIS to chart own course after FSB moved to ditch G-Sii list