One of many world’s greatest sovereign wealth funds is plotting to purchase an enormous stake within the pension buyout agency which stands behind the retirement obligations of corporations together with EMI, the music writer, and WPP, the advertising and marketing providers large.
Sky Information has learnt that the Abu Dhabi Funding Authority (ADIA) is amongst a small variety of events in talks to accumulate JC Flowers’ 21.four% shareholding in Pension Insurance coverage Company (PIC).
The method, which is being run by bankers at Evercore and is at an early stage, is predicted to worth the entire of PIC at near £3bn.
ADIA is more likely to bid for almost all of the Flowers stake, with CVC Capital Companions, the non-public fairness group which beforehand owned System One motor racing, probably shopping for a small chunk of the shares to take its personal holding in PIC as much as 20%.
CVC purchased into PIC a yr in the past, since when it has insured pension liabilities from corporations together with Pirelli and 3i, the listed non-public fairness group.
PIC is certainly one of a crop of huge pension buyout corporations, whose ranks additionally embody Rothesay Life.
It loved a robust 2017, reporting underlying working revenue of £195m.
Final yr, Legend Holdings, which part-owns the Chinese language private computing group Lenovo, purchased an enormous stake in PIC, which is predicted to contemplate a inventory market itemizing within the subsequent couple of years.
PIC’s different shareholders embody Reinet, a Luxembourg-based investor.
Like its rivals, PIC specialises in insuring third events’ company pension schemes and taking over duty for making retirement funds to their members.
The corporate insures greater than 150,000 pensioners by way of the schemes it has struck offers with, and has over £25bn in monetary investments.
PIC’s different company purchasers embody the London Inventory Trade Group, Cadbury and Honda, whereas it additionally has a rising public sector pipeline.
The pension buyout business has grown quickly over the past decade as corporations have sought to search out methods of managing the longevity threat embedded of their outlined profit pension schemes.
The variety of trustees trying to take action within the UK has elevated in latest months amid public controversies over the pension deficits at corporations equivalent to BHS and Carillion.
Sky Information revealed final month group of distinguished Metropolis figures together with the previous boss of the Pension Safety Fund had joined forces to launch Pensions Superfund, a brand new automobile geared toward pooling corporations’ outlined profit schemes.
ADIA declined to touch upon Thursday.