PE-backed Pension Corp. Raising $820M

British specialist insurer Pension Corp. is close to sealing a 500 million pound ($820 million) infusion of capital, most coming from a fund spun off from Swiss luxury goods group Richemont, Reuters reported. The company said Friday it was in exclusive negotiations with Luxemburg-listed Reinet Fund for a 400 million pound investment, Reuters wrote, adding that the remaining100 million pounds would come from existing and new investors. Pension Corp. counts Swiss Re and private equity group JC Flowers among its backers.

PRESS RELEASE
(Reuters) – British specialist insurer Pension Corporation said on Friday it is close to securing 500 million pounds ($820 million) in new investment, mostly from a fund spun off from Swiss luxury goods group Richemont .

Pension Corporation, which charges a premium to take over the liabilities of UK defined-benefit pension schemes, said it is in exclusive negotiations with Luxemburg-listed Reinet Fund for a 400 million pound investment.

Pension Corporation founder and director Edmund Truell told Reuters in an interview the other 100 million pounds would come from existing and new investors, mainly high-net-worth investors and family offices.

The insurer will write at least a further 5 billion pounds business as a result of the 500 million pound cash injection, said Truell.

“I would expect (Reinet’s stake) to be in the range of 30 to 40 percent of the insurance business … This is quite a sizable fundraising and will keep us going for a while,” Truell said.

Pension Corporation is an umbrella company that includes the Pension Insurance Corporation business and a separate re-insurance unit.

Reinet Fund is a wholly owned subsidiary of Reinet Investments , which was created in 2008 as a result of the restructuring of Richemont.

Pension Corporation, whose backers include Swiss Re and private equity group JC Flowers, recently won a mandate from the London Stock Exchange’s pension fund, underlining what Truell called on Friday a “healthy and growing” market.

Pension schemes have insured with specialists 30 billion of liabilities since 2006/07, and the amount is expected to grow to 50 billion pounds before the end of 2012 as companies tackle their pension costs, consultant Hymans Robertson has estimated.

(Reporting by Cecilia Valente; Editing by Will Waterman)