Big Law trio act on £2bn Standard Life pension risk venture

Paul Weiss, Debevoise and Freshfields have taken roles on Standard Life’s new £2 billion pension risk transfer partnership with a group of major private capital and financial institutions.

Paul Weiss is advising Standard Life, while Debevoise is acting for consortium leaders CVC Capital and Prudential and serving as lead legal advisor to the consortium. Freshfields is acting for Goldman Sachs, one of the investors.

Pensions push

The partnership will establish Standard Life PRT Solutions, a new vehicle designed to expand the company's pension risk transfer business and give it greater capacity to compete for some of the UK's largest defined benefit pension schemes.

The venture will have a combined initial capital commitment of up to £2 billion, including £500 million from Standard Life itself, expected to be drawn over five years as new pension business is written.

Standard Life will retain operational control and hold 51% of its shareholder voting rights following completion.

The partnership will combine Standard Life's existing pension risk transfer operation with the investors' private markets capabilities, including asset origination.

Standard Life has been expanding its pensions business. In April, it agreed to buy the UK arm of Dutch insurance giant Aegon in a £2 billion deal steered by Freshfields and A&O Shearman.

Bigger deals

The new capital is intended to help Standard Life compete for larger pension schemes as activity in the UK market continues to grow.

The deal comes amid a run of multi-billion-pound pension risk transfer transactions, with the deals providing a steady stream of mandates for law firms. Legal & General last year agreed a £4.6 billion buy-in with Ford’s pension schemes, on the heels of Pension Insurance Corporation’s £4.3 billion buy-in with Rolls-Royce’s pension fund.

Private capital firms have increasingly moved into the sector. Last year, Apollo-backed Athora acquired PIC for £5.7 billion, while Brookfield acquired life insurer Just Group, giving it a major foothold in the UK pension risk transfer market.

Standard Life estimates that between £350 billion and £550 billion of UK defined benefit pension scheme assets could be de-risked over the next decade, with larger schemes expected to account for an increasing share of the market.

Advising

The Paul Weiss team advising Standard Life is led by London corporate partners Dan Schuster-Woldan and Benjamin Wilkinson.

Debevoise is advising CVC and Prudential Financial and acting as lead legal adviser to the wider consortium. Its team is led by London corporate partner Hugo Laing.

Freshfields is advising Goldman Sachs on its investment in the partnership. Its team is led by private equity partner James Scott and specialist insurance partner George Swan.