The trustee of the James Neill Pension Plan and James Neill Holdings has completed a landmark capital-backed investment (CBI) transaction with Portunes Pension Capital, marking only the second such deal in the UK pensions market.
The deal will support the scheme's long-term funding objectives while allowing it to retain its existing investment strategy.
Under the structure, the James Neill Pension Plan will invest alongside Portunes Pension Capital over a defined period, with the scheme benefiting from a senior-ranking payout backed by external capital.
CBIs are an emerging innovation in the pensions sector, offering schemes access to external capital to reduce investment volatility and progress their long-term funding objectives. This approach illustrates how innovative structuring can deliver funding certainty while preserving flexibility over existing assets and investment positions.
Burges Salmon advised the trustee and the employer on all legal aspects of the transaction as part of a broader adviser team, which included Fieldfisher as legal adviser to Portunes, Gallagher as investment adviser to the trustee and Schroders as investment manager.
Additional advice was provided to the trustee by Carey Olsen and to Portunes by Ogier.
The Burges Salmon team was led by partner Clive Pugh, with support from director Jack Gillions and solicitor Serena Kutty.
Pugh said: "This transaction highlights the increasing maturity of capital-backed solutions in the UK pensions market and the important role they can play in helping schemes manage risk while maintaining investment flexibility. We were delighted to support the trustee of the James Neill Pension Plan and James Neill Holdings on this complex and innovative transaction, working closely with all parties to deliver a structure that meets their long-term objectives."
Aretas Trustees acted as trustee for the James Neill Pension Plan. Partner and chair Antony Miller said: "The successful completion of this transaction represents an important step forward for the plan and demonstrates the value of innovative funding solutions in today's pensions landscape. We are grateful to Burges Salmon for its clear, pragmatic advice and strong understanding of the sector throughout the process."
Schroders said the deal supports the scheme's long-term funding objectives while enabling it to retain its existing investment strategy, illiquid assets portfolio and liability-driven investment (LDI) framework.
In a post on LinkedIn, Schroders head of LDI solutions management Philip Howard said: "Being at the forefront of providing risk-controlled asset management services to innovative endgame providers for UK defined benefit (DB) schemes has been a top priority for the team.
"The use of accurate LDI hedging and global securitised credit strategies can be a powerful tool for providing greater certainty in endgame solutions. We are proud to have continued our investment management partnership with James Neill as part of their capital-backed journey plan."
The deal follows the first capital-backed journey plan (CBJP) deal in April 2020, which has been dubbed as the Nova transaction. This deal enabled an unnamed DB pension scheme to use external capital provided by Portunes Pension Capital to act as a protective buffer to improve funding certainty, fully hedge against interest and inflation risks, and secure member benefits while targeting a buyout.
Fieldfisher worked on both deals. In a post on LinkedIn, partner Sebastian Reger commented: "While Portunes's first CBJP focused on delivering a buyout solution, we evolved the structure to strengthen the scheme's investment arrangement to incorporate existing illiquid assets without the need to transfer them and to accommodate the desire for LDI hedging."
