Clara Pensions, a new defined benefit (DB) consolidator coming into the market, has received £225m in initial capital from TPG Sixth Street Partners (TSSP).
The credit investment firm is expected to invest up to £500m, as the company grows to scale, it was announced today (December 19).
Clara will focus solely on fully-funded schemes and target smaller pension funds, with the goal to act as a bridge for members from their current company sponsor to the insured market.
The company's ambition is to consolidate at least £5bn of pension liabilities over the next five years, and it is now ready to accept its first pension scheme members, subject to any applicable regulatory approvals, it said.
The Pensions Regulator (TPR) will get powers to oversee the consolidation of pension schemes into a superfund, under proposals published by the Department for Work & Pensions earlier this month.
The consultation follows a DB white paper published in March, in which the government revealed plans to promote consolidation in the DB pension market, in which two thirds of the 5,600 schemes have funding shortfalls.
According to Adam Saron, Clara Pensions' chief executive, “strong and patient capital is key” to the company’s model.
He said: “Finding the right partner to provide this has been a careful, crucial journey, and TSSP fulfils exactly the criteria we have been looking for. Its track record and commitment to long-term capital investments chime perfectly with Clara’s aims.
“Today is another significant milestone for Clara and our future members. We now look forward to welcoming our first pension members and beginning their journeys to a safer, insured future.”
FTAdviser reported in October that Clara Pensions was in talks with more than 40 schemes.