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The Actuary The magazine of the Institute & Faculty of Actuaries

Pension Insurance Corporation set for £400m capital investment from Reinet Fund

Pension Corporation has announced that it is in negotiations with Reinet Fund, a specialised investment fund incorporated in Luxembourg, in relation to a potential investment of £400m of new capital in Pension Corporation’s pension insurance business, Pension Insurance Corporation (PIC).

Executive chairman of Reinet Investments, Johann Rupert (pictured) said, "Pension Corporation has transacted both the UK’s largest corporate and the first public sector backed pension insurance buyouts. Reinet Fund is in exclusive negotiations with Pension Corporation and its key stakeholders for a transaction involving the re-organisation of its capital structure and an investment by Reinet Fund of approximately £400m through which it would become a principal shareholder in the business.

"Completion of any transaction is subject to the successful conclusion of these negotiations and to regulatory and other approvals. Further information regarding the status and details of this potential investment will be communicated to our shareholders at the appropriate time."

Sir Mark Weinberg, chairman of Pension Insurance Corporation Holdings, said: "As a stable long-term investor, we believe that the Reinet proposal will be attractive for the current and future customers of PIC.

"This investment would augment our existing capital resources, enabling PIC to maintain a market leading position in what we believe is a rapidly growing market for pension insurance and risk transfer."

PIC recently announced an agreement with the trustees of the London Stock Exchange Pension Scheme to insure around £200 million of the scheme’s liabilities (The Actuary, 13 May). The deal included an innovative structure which will enable the scheme to insure future pensioners in annual tranches over the next five years.

A report earlier this week from Hymans Robertson predicted Q2 2011 would be a record quarter for pension scheme de-risking (The Actuary, 23 May), buoyed in particular by the PIC LSE transaction.