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EC News Investments Edition: Mandates & Buyouts (March 2017)

  • Publish Date: Posted about 7 years ago

Round-up of the mandates and buyouts from the global investment market with stories from Aviva, PIC and Essex pension fund.

EC News Investments is accompanied by a round-up of the months people moves and latest news, giving you indepth insight into the market.

 

Cineworld and Aviva enter defined benefit buyout

Cineworld announced that it finalised a buyout for its defined benefit (DB) pension scheme with Aviva Annuity UK last December at a cost of £4.8m. Cineworld, which used to be known as Metro-Goldwyn-Mayer (MGM), penned the deal for the MGM pension scheme on 15 December 2016, with all members' benefits being secured by Aviva. The scheme had fewer than 500 members and was closed to future accrual in 2009. As of 30 December 2015, it had a surplus of £10.5m on the IAS 19 accounting measure. At the time, it had liabilities totalling £31m and assets of £41.5m. The scheme's last triennial valuation on 5 April 2015 also showed a surplus, but at a lower amount of £1.7m. The company then committed £1.6m annual contributions. A Cineworld spokesperson said, "For us, this buyout removes any risk and it is also in the best interests of scheme members."

 

Alps Electric pens £33m buyout with PIC

Alps electric have entered into a buyout with PIC worth £33mn. The company was advised by Deloitte while the trustees were advised by Capita Employee Benefits. Trustee chairman Peter Woodland said he was delighted to have been able to insure the pension benefits of members in spite of volatility and uncertainty in the markets. "We entered into an agreement with PIC to insure once certain conditions were met and this allowed us to complete the transaction when a window of opportunity in markets opened. I want to thank PIC for their flexibility and innovation in helping us to achieve this result and our advisers, Capita Employee Benefits, for their help and support." PIC actuary Matt Richards said that amid market volatility, trustees should put in place the right structures and processes to allow them to move quickly once their pre-agreed triggers have been met. "The trustees of the scheme did exactly that. Because of their foresight this transaction was able to be completed, bringing increased levels of safety and security to members' benefits." Capita Employee Benefits head of pensions risk management Akash Rooprai added, "We worked with PIC to manage the transition of assets from a ‘with profits policy' in an effective way that maximised the efficiency of the transaction." PIC recently completed a £90m buy-in for the Civil Aviation Authority's pension scheme.

 

Essex pension fund awards £100m unlisted infrastructure mandate

The Essex County Council pension fund has appointed IFM Investors and JP Morgan Asset Management to run a £100m unlisted infrastructure mandate. The local government pension scheme (LGPS) tendered the mandate last year, saying it would think about awarding the mandate to one or two managers and would look at open-ended and closed-ended funds that focused on UK, European or global assets. The £100m allocation represents 2% of the public pension fund’s assets, based on the latest valuations. The council received 22 bids for the mandate. The Essex pension fund is part of the ACCESS pool that is being formed by 11 local authorities in response to government instructions to consolidate LGPS funds into several pools. The ACCESS pool, a “collaboration of Central, Eastern and Southern Shires”, has around £33bn of assets under management, according to its website.