Standard Life has expanded its risk transfer business, through a new partnership with CVC, Prudential Financial, Goldman Sachs and MS&AD.
This partnership will be funded with a combined capital commitment of up to £2bn over five years, enabling Standard Life to more effectively compete for risk transfer business from larger pension schemes.
Standard Life will commit £500m to the partnership, with the balance coming from the consortium.
Standard Life will retain full operational control of the partnership. It says the arrangement will enable it to expand its “compelling” pension risk transfer proposition, by combining its operational expertise with the additional capital and specialist investment capabilities of the consortium. This includes CVC’s, PFI’s and Goldman Sachs’ global private markets capabilities, which will look originate high-quality assets to back pension scheme liabilities for the partnership and for Standard Life’s existing PRT business.
Standard Life says that access to differentiated private markets origination should improve its pricing competitiveness and structuring flexibility, enabling it to offer trustees more compelling and innovative terms on complex de-risking transactions.
Standard Life points out that schemes at the upper end of the market are anticipated to drive a significant and growing share of the £350bn to £550bn of UK DB scheme assets that are expected to de-risk over the next decade.
Standard Life group CEO Andy Briggs says: “We are delighted to announce the expansion of our PRT business in partnership with a group of internationally recognised financial institutions, who are committing global capital into the UK PRT market.
“By bringing together our comprehensive PRT capabilities with our partners’ specialist private markets capabilities and significant capital resources, coupled with a trusted and well-known brand in Standard Life, we will be able to offer trustees and sponsors for the largest pension schemes an alternative to secure the pensions of their members across the UK.”
He adds that the partnership further accelerates Standard Life’s vision to become the UK’s leading retirement savings and income business.”
Nuwan Goonetilleke, chief executive officer of Standard Life PRT Solutions and interim CEO, retirement solutions and asset management adds: “This partnership has been deliberately structured to continue to secure high-quality outcomes for members, while supporting trustees in executing complex de-risking transactions with confidence.
“Our consortium approach enhances our ability to deliver competitive pricing and innovative structuring for trustees, whilst maintaining Standard Life’s independence and control.”
CVC president Peter Rutland adds: “This partnership builds on CVC’s experience in the attractive UK PRT market through a new, long-term capital commitment, whilst leveraging Standard Life’s track record and established proposition with trustees.
“The partnership is ideally suited to CVC’s insurance asset management franchise and credit origination capabilities.”
Goldman Sachs Alternatives, global co-head of private credit, Vivek Bantwal says: “Goldman Sachs has deep resources to provide customised capital solutions for Standard Life and its corporate pension clients.
“We look forward to serving their needs by leveraging our rigorous credit selection process and deep asset origination funnel through the investment bank.
“Across the firm, we have expertise in markets, risk management, structuring and liquidity solutions that, when combined with our knowledge of the UK PRT market, will be highly supportive for the partnership in delivering efficient and well-structured solutions for large and complex PRT transactions.”