LONDON, Sept 4 (Reuters) - UK specialist insurer Pension Corporation is eyeing a third capital raising round of up to 400 million pounds ($652.7 million) from new and existing investors, the Financial Times reported on Friday.
Citing people close to the privately-owned specialist pension buy-out and insurance company, the FT said the capital would be used to back new deals taking over liabilities of closed pension schemes, books of pensions in payment, or deferred pensions.
The company does both buy-out deals, where it takes over assets and liabilities, and buy-in deals, where it writes an insurance policy against liabilities.
JPMorgan (JPM.N) is co-ordinating the capital raising and might add to the money it put in during Pension Corp’s second capital raising last year, which gave it about 5 per cent of the group.
Pension buy-outs were once dominated by Prudential (PRU.L) and Legal & General (LGEN.L) until a number of smaller, specialist firms, usually backed by private equity, entered the field earlier this decade.
Pension Corp recently tried to buy rival Paternoster, one of the first such companies to set up which is run by Mark Wood, the former Prudential executive. That deal failed and Paternoster is now restricted from pursuing new business due to a lack of spare capital.
Pension Corp hopes to raise fresh money potentially in the form of equity and long-term junior debt, while the rest of the capital would be lined up as commitments for when deals are done.
One person familiar with the company said that it had spare capital, but “was seeing more large deals coming its way and that prospective counterparties wanted increased certainty it would have the extra capital needed to support a deal.” (Reporting by Cecilia Valente, Editing by Ian Geoghegan)