TPT Retirement Solutions (TPT) has secured regulatory approval from the Financial Conduct Authority (FCA) to set up a commercial investment company to provide fiduciary and consultancy services to defined benefit (DB) schemes.
The move - first announced in June when TPT revealed it was restructuring following a strategic review - will allow TPT to offer fiduciary management and consultancy services to trustees without requiring a scheme to join its master trust.
TPT Investment Management (TPTIM) will offer fiduciary management services as part of a DB offering that allows trustees to access TPT's pensions and investment expertise while retaining the trusteeship of their scheme. TPTIM will also be responsible for the management of £10.4bn in combined assets of TPT's existing master trust.
The new investment management company will build on TPT's existing in-house investment management function.
It said that, by transitioning the existing investment management capability into a separately regulated investment management entity, TPT could make its best-in-class capability available to the trustees of non-TPT pension schemes in addition to TPT's current master trust.
TPT said TPTIM's proposition brings to market the benefits of asset pooling and would provide access to a range of investments that would not necessarily be available as a standalone scheme - including greater exposure to alternative investment assets, such as infrastructure and broader private market assets, as well as TPT's responsible investment capabilities.
It said TPTIM would build on the successful model of scheme consolidation - pooling assets to deliver value and impact - for the benefit of corporate pension schemes.
Specifically, it said it is launching a series of collective investment vehicles as alternative investment funds - collective vehicles that will allow the aggregation of the assets overseen by TPT with those of external pension schemes, generating immediate scale benefits across a wide range of assets.
Cliff Speed, TPT's current chief investment officer will become the new chief executive of TPTIM.
New DB proposition
TPTIM's fiduciary management service will be part of TPT's new DB proposition set to launch in the final quarter of 2023.
It said the proposition will provide pension schemes with the full suite of services enjoyed by those in a master trust - including trustee support, administration, actuarial, investment management and covenant - while allowing schemes to retain their existing trusteeship. This proposition will allow schemes to benefit from reduced fees through economies of scale, improved governance and investment expertise. This offering will sit alongside TPT's existing master trust.
Commenting on the FCA approval, TPT Retirement Solutions chief executive David Lane said: "We are thrilled to be launching our new investment company. This marks the beginning of a new and exciting chapter for TPT. We remain firm advocates of the master trust model and are the standard bearers of consolidation. However, we recognise that one size doesn't fit all, and for some trustees joining a master trust is not a viable option.
"Through our new offering, we will offer trustees the ability to retain legal responsibility for the overall delivery of member benefits, whilst generating efficiencies through scale and access to best-in-class pension scheme investment management capability. This will provide better value to the schemes, incorporate the highest levels of stewardship and, ultimately, deliver better outcomes for members."
Lane added: "Many lay trustees struggle to keep up with the growing regulatory responsibilities and administrative requirements placed upon them. TPT will be able to assist them with this as part of our new proposition. We look forward to launching our new DB proposition in due course, which has been enabled by the formation of TPTIM."