Standard Life (LSE:SDLF) announced its agreement for a strategic partnership with CVC Capital Partners, Prudential Financial of the US, Goldman Sachs and MS&AD to expand its pension risk transfer (PRT) business into the largest and most complex UK defined benefit schemes, subject to regulatory approval.
The retirement specialist, which serves 12 million customers and has de-risked £32 billion of defined benefit liabilities over the past decade, will contribute £500 million of a combined initial commitment of up to £2 billion, with the balance from the consortium led by CVC and Prudential Financial.
Capital is expected to be drawn over five years, funded from Standard Life's yearly excess cash generation, with the near-term impact on its Shareholder Capital Coverage Ratio and Solvency II leverage ratio described as minor.
The partnership, to be branded Standard Life PRT Solutions, pairs Standard Life's existing PRT operating model with private markets asset origination from CVC, PGIM and Goldman Sachs Alternatives, while Standard Life retains 51% of voting rights and full operational control.
Schemes at the upper end of the market are expected to drive a growing share of the £350 billion-£550 billion of UK scheme assets projected to de-risk over the next decade, according to Lane Clark & Peacock.
"By bringing together our comprehensive PRT capabilities with our partners' specialist private markets capabilities and significant capital resources... we will be able to offer trustees and sponsors for the largest pension schemes an alternative to secure the pensions of their members," said Andy Briggs, Group Chief Executive Officer.
Completion is expected in the first half of 2027, ahead of any new business being written, and follows Standard Life's separately announced acquisition of Aegon UK, disclosed on 15 April.
