Brookfield is setting up a new insurer to enter the UK bulk annuity market following a boom in corporate pension deals worth £40 billion expected this year, according to media reports.
According to the FT, the Canadian-based alternative investment manager aims to capitalise on UK employers “offloading” their liabilities and assets due to rising interest rates.
Brookfield CEO Sachin Shah said the company intends to start bidding on UK transactions by the end of the year with established firms like Phoenix Group and Legal & General potentially facing competition from the new entrant.
LCP’s pension risk transfer update 2024 predicted two new market entries in 2024, after M&G’s re-entry in late 2023 after its exit in 2016 as part of Prudential. Royal London entered the market in March, and Utmost declared plans to enter later in 2024. But it also predicted one more new entrant by year’s end, increasing the number to a record 11 active insurers.
Brookfield has around $925 billion in assets under management with 2,400 investment specialists and 240,000 operating employees in 30 countries. It says it manages over 2,000 investments globally, employing operational experience to help customers grow businesses and build long-term wealth.
LCP partner Charlie Finch says: “Brookfield’s planned entry demonstrates how vibrant the UK bulk annuity market is. t will take the market to a record 11 participants following the entry announcements earlier this year by Royal London and Utmost.
“Brookfield already participates in both the US and Canadian bulk annuity markets and has the potential to be significant provider in the UK market. Their entry will add further capacity and competition as record numbers of defined benefit schemes enter into buy-ins and buy-outs, with volumes of up to £600bn predicted over the next 10 years.”
