UK - Buyout deals totalled £8.1bn ($13bn) last year, with £1.6bn of this business written in Q4 alone, research by JLT Pension Capital Strategies shows.
The consultant said this figure represented an 8% increase from 2009.
PCS said it expected total buyout activity to exceed £10bn this year as the result of a very healthy quotation pipeline in Q4 2010 and a bullish view in Q1 this year.
It found the total volume of quotations outstanding in the market also remained high at about £13.8bn.
PCS head of buyout services Tiziana Perrella (pictured) said: "There remains a clear desire from sponsors for schemes to reduce risk, with buyouts being the ultimate aim. Insurers are continuing to adapt to the requirements of schemes, developing intermediate solutions to enable full buyouts to become attainable over time."
It said stronger funding requirements, positive investment returns, and desire from some sponsors prepared to pay a top-up premium to remove pension schemes from their balance sheet will drive buyout activity.
Meanwhile, buyouts look less attractive because of uncertain economic conditions for companies, prices remaining higher than the peak years of late 2007 to 2009, and volatile market conditions posing timing issues for trustees to execute deals.
Perella added: "We expect the market to continue to innovate, providing solutions for all but a few very poorly funded schemes. Though very few schemes will be in a position to complete a full buyout, many could realistically buyout pensioner liabilities or even a tranche of liabilities."
LCP partner Charlie Finch said Q4 was large because of the £900m GlaxoSmithKline deal (Global Pensions: 16 November 2010), but overall 2010 was slightly lower than people's expectations.
He said: "Funding positions did not improve as much as people thought as equity markets were volatile and pricing was expensive over the summer because of dislocations in the swaps market compared to the gilt market."
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