Gill Wadsworth reported this week that the UK could see its first defined benefit (DB) superfund designed to support run on as early as January next year following provider TPT Retirement Solution’s announcement that is seeking a new consolidation vehicle.
TPT has secured capital to fund the first GBP1 billion of transactions which it anticipates will be sufficient to support a number of deals subject to scale, regulatory approval and market conditions.
The TPT DB superfund will be the first to hold schemes and oversee their investment in the markets rather than targeting buyout with an insurer, which the provider says will “broaden the range of endgame solutions available to employers and trustees”.
TPT’s announcement follows changes announced in the UK government’s Pension Schemes Bill which introduces a permanent regulatory regime for superfunds and superfund bulk transfers, Wadsworth explains.
Commenting on the development, Richard Wellard, Head of Alternative Risk Transfer at consultancy Hymans Robertson, says: “This is an exciting development for DB schemes considering their appropriate end game. This differs to other superfund transactions to date, which have acted as a bridge to buyout, so it is good to see the innovation in the development of the superfund market. We expect the prospect of using future surplus for member augmentations will be interesting and appealing to a wide variety of pension schemes. This will also provide healthy competition into the superfund market.”
Our In My Opinion this week comes from Carlos Von Hardenberg, Investment Manager, Mobius Investment Trust, who writes that emerging markets are some of the hardest hit by new US tariffs. Despite this, Von Hardenberg says: “In a world of rising protectionism, investors should look beyond export data and instead focus on the structural strengths of emerging markets, particularly those with large, growing, and increasingly affluent populations with strong domestic demand, and those diversifying trade relationships over the long term. India and Brazil exemplify such economies and are well placed to remain resilient against higher tariff levels.”
It’s the last day of voting in the Institutional Asset Manager Service Provider Awards – get your votes in now as the firms with the most votes win – simple! Use this link.
Beverly Chandler, Managing Editor, Institutional Asset Manager
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