UK - Edmund Truell, former head of Duke Street Capital, has received backing from US financier Christopher Flowers for his pension buy-out firm, media reports have claimed.
Truell had last month stated his Pension Insurance Corporation (PIC) had raised around £400m in capital, but the Financial Times today claimed he had secured £1bn from a group of investors led by Flowers.
According to the FT, the other investors included ABN AMRO, HBOS, Royal Bank of Scotland and Swiss Re.
PIC, who has received authorisation from the Financial Services Authority, is a new financial institution that aims to provide up to £20bn worth of new capacity to the UK pensions insurance market.
PIC is one of the latest entrants into the increasingly competitive UK buy-out market, which already includes Legal & General, Prudential, Paternoster and Synesis Life.
There has yet to be any significant activity from firms looking to offload their pension liabilities, but new accounting changes - which will require companies to show their pension liabilities on their balance sheets - could help push some companies down that route, suggested Anthony Ashton, an investment consultant with Hewitt.
Ashton added that only a small percentage needed to do so for it to become a large market.
"When one of these companies buys a pension scheme they charge a premium, which makes it expensive, but it could be a high volume business, when you consider that there are £1trn of DB pension liabilities in the UK alone," said Ashton.
So it would only take a small percentage of companies to go down that route and it would be a large market. But whether it is a lucrative market is a moot point."
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