Expansion of Standard Life’s Pension Risk Transfer business through partnership with CVC, Prudential Financial Inc, Goldman Sachs and MS&AD with a combined initial capital commitment of up to £2bn.

Key Highlights 

Expands Standard Life’s PRT business to support a broader range of defined benefit pension schemes 

  • Schemes at the upper end of the market are anticipated to drive a significant and growing share of the £350bn-£550bn UK scheme assets expected to be de-risked over the next decade. 

  • The Partnership is expected to expand Standard Life’s participation in the UK PRT market, building on its own existing capital allocation, reflecting the strong customer demand and attractiveness of the opportunity for sustainable growth and returns, and it generates a new source of fee-based revenues for Standard Life. 

  • The Partnership is supported by long-term, committed capital aligned to the long-dated nature of defined benefit pension liabilities, providing a stable funding base for future transactions. 

A differentiated proposition for trustees of the UK's largest DB schemes 

  • The Partnership combines the strength of Standard Life’s existing PRT proposition and operating expertise with the additional capital and specialist investment capabilities of the Consortium, giving more UK DB schemes access to risk-transfers at scale and supporting the long-term security of members' benefits. 

  • Trustees of large DB schemes will benefit from the high standards of member servicing and security, governance, and client service that Standard Life delivers today. 

Access to unique private markets asset origination 

  • CVC, PGIM (PFI’s asset management business) and Goldman Sachs Alternatives will originate high-quality assets to back pension scheme liabilities for the Partnership and for Standard Life’s existing PRT business. 

  • Access to differentiated private markets origination is expected to improve Standard Life's pricing competitiveness and structuring flexibility, enabling it to offer trustees more compelling and innovative terms on complex de-risking transactions.

Financially attractive for Standard Life 

  • Standard Life expects to fund its £500m capital commitment over five years from yearly excess cash generation. 

  • The Partnership expects to generate attractive returns on its PRT business, and in addition Standard Life will receive fee-based payments from the Consortium for its oversight, operational services and origination of PRT transactions. 

  • Standard Life expects its total returns from the Partnership to support its yearly mid-single digit % Operating Cash Generation growth going forward and support its IFRS adjusted operating profit over time. 

  • The near-term impacts to Standard Life’s Shareholder Capital Coverage Ratio (SCCR) and its Solvency II debt leverage ratio are expected to be minor. 

 

Andy Briggs, Group Chief Executive Officer, Standard Life, said:

We are delighted to announce the expansion of our PRT business in partnership with a group of internationally recognised financial institutions, who are committing global capital into the UK PRT market. For over 200 years, Standard Life has supported people across the UK to plan for and secure their retirements, and this focus and commitment remains central to our strategy today. By bringing together our comprehensive PRT capabilities with our partners’ specialist private markets capabilities and significant capital resources, coupled with a trusted and well-known brand in Standard Life, we will be able to offer trustees and sponsors for the largest pension schemes an alternative to secure the pensions of their members across the UK. This partnership further accelerates Standard Life’s vision to become the UK’s leading retirement savings and income business.

- Andy Briggs

Nuwan Goonetilleke, Chief Executive Officer of Standard Life PRT Solutions and Interim CEO, Retirement Solutions and Asset Management, Standard Life, said:

This partnership has been deliberately structured to continue to secure high-quality outcomes for members, while supporting trustees in executing complex de-risking transactions with confidence, combining Standard Life’s expertise with access to a diversified set of best-in-class private markets originators. Our Consortium approach enhances our ability to deliver competitive pricing and innovative structuring for trustees, whilst maintaining Standard Life’s independence and control.

- Nuwan Goonetilleke

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