Simon True: Clara's active sponsor transaction with the £210m Wates Pension Fund in December last year had been a 'game changer' for the superfund
Clara Pensions is looking at innovations including a proposition for small schemes and a value share offer as its pipeline of potential business hits £12bn.
Speaking at an event in London yesterday (23 October), Clara chief executive Simon True reflected on the two years since his firm completed its first deal – noting he believed there was a "huge market" for the superfund, with around £250bn in schemes that Clara could serve and help improve outcomes for members.
And he said there were an increasing number of applications for superfunds such as Clara – noting that his firm had already done a number of quite different transactions since it was formed.
Indeed, while Clara's first two deals – its £590m transaction with the Sears Retail Pension Scheme in November 2023 and its Pension Protection Fund+ deal with the £600m Debenhams Retirement Scheme in March last year – looked very similar and were for schemes with no active sponsor, its following two deals were quite different.
True said its active sponsor transaction with the £210m Wates Pension Fund in December last year had been a "game changer" for the superfund, saying the number of schemes coming to Clara for quotations had trebled since that deal.
Since then, Clara has also completed another innovative deal – a transaction with The Church Mission Society (CMS) and the trustee of the £55m CMS Pension Scheme in June this year. This was the first deal to make use of a "connected covenant" structure and the first involving a not-for-profit employer, something the superfund said at the time "demonstrated the broad appeal of consolidation".
True said timings of future deals were "really hard to predict" but added he was "bullish" about the outlook for the business – noting there were currently 25 schemes in Clara's pipeline, with combined assets of £12bn.
He said these schemes varied greatly in size – with six having assets in excess of £1bn, a further 15 between £100m and £1bn in size and the remainder being sub-£100m.
True said that Clara was also continuing to innovate and was currently looking at a small scheme proposition as well as a value share offering that could allow schemes to run-on a little longer before going to buyout, allowing schemes to share the benefits of consolidation.
He said that, for schemes that weren't quite at the funding level for the superfund, Clara was developing, in association with its asset manager Van Lanschot Kempen, a "bridge to Clara" product to help those schemes on the journey to superfund.
Clara has also launched a new private markets vehicle to enable it to invest efficiently in a broader range of assets.
True's comments follow the publication of the Pension Schemes Bill, laid before parliament in June, which will set up a new, permanent regulatory framework for defined benefit (DB) superfunds.
At the beginning of this month, TPT Retirement Solutions announced it was set to launch a DB superfund designed to support run-on.
TPT said the proposition – which has secured capital to fund the first £1bn of transactions – will broaden the range of endgame solutions available to employers and trustees.
At a roundtable in September, Barnett Waddingham said there were at least two firms are at "fairly advanced" stages of planning to enter the superfund market following the introduction of the Pension Schemes Bill and as sponsor interest in the endgame option grows.
