Retirement specialist Standard Life has entered a strategic partnership with a consortium of institutional investors to expand its Pension Risk Transfer (PRT) business, targeting up to £2 billion in capital commitments over five years.
The consortium includes CVC Capital Partners plc and Prudential Financial, Inc. (PFI) of the US, alongside The Goldman Sachs Group, Inc., MS&AD Insurance Group Holdings, Inc. and other long-term institutional investors.
Standard Life will commit £500 million, with the remaining capital provided by the consortium, led by CVC and PFI.
The Partnership combines Standard Life’s PRT capabilities with CVC’s, PFI’s and Goldman Sachs’ global private markets asset origination, enabling it to deliver its employer proposition and excellent customer service to a broader range of pension schemes, while retaining full operational control of the partnership.
The expansion will help Standard Life support schemes across a broader range of sizes, including the largest and most complex defined benefit (DB) schemes. The partnership is also expected to expand Standard Life’s participation in the UK PRT market
Schemes at the upper end of the market are anticipated to drive a significant and growing share of the £350 billion – £550 billion UK scheme assets expected to be de-risked over the next decade.
CVC, PGIM (PFI’s asset management business) and Goldman Sachs Alternatives will originate high-quality assets to back pension scheme liabilities for the partnership and for Standard Life’s existing PRT business.
This will enhance pricing competitiveness and structuring flexibility, enabling Standard Life to offer trustees more compelling and innovative terms on complex de-risking transactions.
Andy Briggs, Group Chief Executive Officer, Standard Life, said: “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. For over 200 years, Standard Life has supported people across the UK to plan for and secure their retirements, and this focus and commitment remains central to our strategy today.
“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. This partnership further accelerates Standard Life’s vision to become the UK’s leading retirement savings and income business.”
Peter Rutland, President, CVC, commented: “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. We look forward to working in close collaboration with Standard Life and our consortium partners in the years ahead.”
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