UK - Bulk annuity buyout vehicle Paternoster, which has initially focused on mid market companies, could be about to come to the rescue of those with much larger pension fund deficits, who would farm off some of their liabilities, market sources have suggested.
When the company was launched in April, chief executive Mark Wood told Global Pensions that Paternoster would acquire defined benefit pension schemes from mid market UK companies, which he said had been historically under-served.
Now a source close to Paternoster has said the company is involved in up to three large transactions where such an approach might be viable.
But the market as it stands today, dominated until recently by Prudential and Legal & General, has not catered to some of the very large deficits such as those currently burdening companies in the FTSE 100.
At the time Wood agreed there was a possibility the market for buyouts could develop to enable these companies to farm off their liabilities in tranches without taking the controversial step of winding up their schemes first.
Market speculation has suggested Paternoster is close to its first deal, placing itself in head on competition with Prudential and L&G.
Paternoster announced today that it had appointed Ron Sandler as chairman.
Amongst other roles, Sandler has previously served as president of the Institute of Financial Services, chief operating officer of NatWest Group, and chief executive of Lloyd’s of London.
He commented that it was a time of great change for pension provision in the UK and that radical thinking was needed to address the situation.
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