Round-up of the mandates & buyouts from the global investment market with stories from Aberdeen Asset Management, Standard Life, Cancer Research and more.
EC News Investments is accompanied by a roundup of the months latest news and people moves, giving you indepth insight into the market.
Aberdeen Asset Management and Standard Life recommend all-share merger deal
Aberdeen Asset Management and Standard Life have announced they have agreed a recommended all-share merger deal, which would create a formidable player in the active asset management industry globally running over £660bn of assets. Aberdeen and Standard Life said an agreement has been reached and they are recommending the deal to shareholders. Under the terms of the deal, Aberdeen shareholders would get a merger ratio of 0.757 new Standard Life ordinary shares for each Aberdeen ordinary share. Based on this exchange ratio and the closing price of 378.5p per Standard Life share on 3 March 2017, the merger values each Aberdeen share at 286.5p and Aberdeen's existing issued ordinary share capital at approximately £3.8bn. Following completion of the merger, Aberdeen shareholders would own approximately 33.3% and Standard Life shareholders approximately 66.7% of the combined group on a diluted basis.
20% of Gresham House to be bought by Berkshire Pension Fund
The Royal County of Berkshire Pension Fund is to obtain a 20% interest in specialist asset manager Gresham House, backing a new alternative investment platform for other local government pension schemes. The Berkshire fund will provide the cornerstone investment for a new £300m (€353m) fund Gresham House plans to launch on the platform, called the British Strategic Investment Fund (BSIF). The BSIF is targeting investment in housing, infrastructure and innovation, three themes identified by the UK’s chancellor Philip Hammond in his 2016 Autumn Statement as being of strategic importance to the UK. John Lenton, chairman of Berkshire Pension Fund, said the platform would enable the pension fund to reduce costs and obtain diversity in investments. Lenton confirmed that the pension fund will target niche areas and smaller and longer-term investments than those that interest the major investment houses. Lenton said, “These give us the potential of a higher long-term return which is so important to a pension fund like ours that has to plan for pensions that will be drawn down many years in the future.”
£300m mandate awarded by Nottinghamshire County Council
Nottinghamshire County Council Pension Fund has awarded a £300m buy-and-hold fixed income mandate to Kames Capital. The mandate is designed to help the pension fund implement its infrastructure investment plans. Kames will invest the £300m in a portfolio of corporate bonds with a target yield of 1.25% over Libor after fees, with the aim of providing periodic cash flow to meet the pension fund’s five-year infrastructure investment plan.
Cancer Research and Canada Life agree £250m buy-in
Cancer Research UK Pension Scheme has penned a £250m pensioner buy-in with Canada Life, bringing the insurer into the mid-range de-risking market. The buy-in was funded using the scheme's assets, primarily its gilt holdings, and will protect against risks associated with investments and longevity. The scheme is thought to have taken advantage of "attractive pricing" to improve its funding position. The deal will insure the scheme's 1,355 pensioners and dependant pensioners, which represent a third of the scheme's total obligations. The buy-in is Canada Life's fourth deal and its biggest to date, significantly surpassing its £35m buy-in with AG Barr last September. It signals Canada Life, which entered the buy-in market in 2015, may be moving to compete with other mid-range insurers, such as Legal & General, Pension Insurance Corporation and Scottish Widows. Cancer Research UK chief financial officer Ian Kenyon said, "We are pleased to secure a transaction that both improves the funding position of the pension scheme and reduces the risk of contributions needing to increase in the future. This is another action which serves to reduce the charity's base cost to concentrate spending on research."