A consortium led by CVC Capital Partners and US insurer Prudential Financial is close to securing a stake worth more than £1bn in Standard Life’s pension risk transfer business, according to a report by thew Financial Times citing unnamed people familiar with the discussions.
The group has emerged as the frontrunner in a competitive process to invest in a newly created Standard Life subsidiary designed to support larger defined-benefit pension buyouts, the people said. The deal has not yet been finalised, but could be announced as soon as next month if talks progress as expected.
Under the proposed structure, the consortium would inject capital into Standard Life Assurance (SLAL) over time, with funding deployed progressively as the business executes pension risk transfer transactions.
The model is intended to provide Standard Life with additional balance sheet capacity to pursue larger pension scheme deals, positioning it more directly against established UK insurers active in the sector, including Pension Insurance Corporation, Legal & General and Rothesay.
Pension risk transfer transactions involve companies offloading defined-benefit pension liabilities to insurers, which then assume responsibility for paying retirees. Insurers generate returns if investment performance on underlying assets exceeds future pension obligations.
The UK market is expected to see between £350bn and £550bn of such deals over the next decade, according to consultancy estimates, although activity has moderated in recent periods.
Standard Life, CVC and Prudential Financial reportedly declined to comment.
