The Financial Times has reported that Apollo, Carlyle, and KKR are all exploring bids for London-based Pension Insurance Corporation (PIC) ahead of the deadline, citing people familiar with the matter.
Earlier this year, PIC announced a record £6.5 billion UK pension buy-in deal with the RSA UK Pension Trustees. It’s been an active year for the pension risk transfer market, and Apollo, Carlyle, and KKR are reportedly eager to enter the UK market during a time of growth.
According to the FT, the interest of all three companies remains in the preliminary stage and there’s no guarantee an offer will be made, and, people familiar with the matter said that there could also be other potential bidders.
Sources also told the FT that Canada’s Brookfield Asset Management mulled an offer for PIC but ultimately decided not to. It’s understood that investment bank JP Morgan is advising on the deal and has invited bids, reports the FT.
The FT reached out, but Apollo, Brookfield, Carlyle, KKR, and JP Morgan all declined to comment on any potential bid for PIC.
In September, PIC, the specialist insurer of UK defined benefit pension schemes, reported an “excellent first half of the year” with an adjusted operating profit of £506 million, and new business premiums of £6.5 billion.
The high interest rate environment has had an impact on the pension market, and with scheme funding levels elevated, the expectation is that billions of pounds of pension obligations will be transferred to insurers such as PIC.
According to advisers, private capital entities have spent some serious time looking at how best to participate in the UK market, with an acquisition of an existing player seen as a better approach than backing a new market entrant, reports the FT.
