PIC raises £250m to snap up struggling DB schemes

PIC raises £250m to snap up struggling DB schemes

Pension Insurance Corporation, the insurance company that specialises in buying out or insuring burdensome defined benefit (DB) schemes, has raised an additional £250m in investor capital to fund expansion.

The insurer, which claimed it has about 25 per cent share of the market and competes with the likes of Legal & General, Rothesay Life, Partnership and Aviva, would not name any DB schemes it is currently in talks with.

But a spokesman for the insurer estimated there was £10bn-worth of bulk annuities business in the pipeline.

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The biggest investor in the latest round of capital raising was Reinet Fund, the investment arm of the Rupert Family and the biggest shareholder in the firm, which put in £140m.

The other investor was Chinese investment house Legend Holdings Corporation, which put in £110m.

Other shareholders include RBS, JP Morgan, private equity investor JC Flowers, and Saudi investor Alistithmar.

Last year, PIC took on £2.8bn of liabilities, including the full buy-out of the £2.4bn Philips UK Pension Scheme, which the insurer claimed was the largest full DB buy-out in history. In May this year, it insured Aeon Retirement Plan for £900m.

A spokesperson for PIC told Financial Adviser that the well-publicised challenges facing DB schemes – including member longevity and low interest rates – meant an increasing number of companies were looking to get rid of their schemes.