L&G says buyout market will top £10bn in 2008

The insurance firm said the spate of deal making in the last quarter of 2007 and early 2008 showed no sign of abating.

And it believed the first £1bn deal was "just around the corner".

Legal & General managing director of annuities Simon Gadd said: "The buyout market has never been busier, there's probably £20bn worth of buyouts by value being tendered for at the moment."

He added that he did not expect all of those deals to complete this year but saw no reason why the market should not hit the £10bn mark.

He said: "Before the buyout market took off in the final quarter of 2007, the market use to see flows of about £1bn a year. In the first quarter of this year, between £2.5bn to £3bn of buyout deals closed. We can expect quarter two to reflect the activity level of the previous quarter."

According to Gadd half a dozen schemes were currently in the process of reviewing their options for a buyout.

Gadd commented: "Finance directors are looking at buyout options as regulation, longevity, accounting rules and investment volatility has pushed pension costs and risks up their agenda."

These comments come as Pension Corporation also predicted transfers would top £10bn in 2008 (PP Online, June 17).