19 July 2022
K3 Advisory and Cartwright announce £103 million full buyout
K3 Advisory, the pension market’s only specialist independent bulk annuity and consolidator advisory business, and market leading end-game advisory business to the fiduciary management market, together with actuary and consultant Cartwright, today announced the successful completion of a £103 million buyout for a US based engineering company with operations in the UK and globally. The deal completed in December 2021, with insurer Just Group, and covered 298 deferred members and 25 pensioners.
The buyout is the second transaction for the scheme following a pensioner buy-in in August 2020, also with Just Group.
Adam Davis, Managing Director at K3 Advisory, commented: “Particularly noteworthy with this deal is that we were able to complete in just two months – an incredible achievement given typical transaction time usually sits at between three and six months. Working closely with our partners, and strong market connections, we saw the market was ideal for transacting. With the existing insurance already in place, we were able to move very quickly, snapping up the favourable pricing available and resulting in a great outcome all round.”
Sam Roberts, Director of Investment Consulting at Cartwright commented: “We continuously and closely monitor our clients’ schemes so when an opportunity presents itself, we can seize it by acting quickly. This deal was a great example of how things can move very quickly when all parties are aligned, and the preparation has been put in place over the months and years leading up to the transaction. When we were appointed in 2018 there were significant issues over the accuracy of the member data and benefits recorded. This took many months to correct, without which the successful transactions in 2020 and 2021 could not have happened. This preparation, combined with reacting quickly to other investment opportunities along the way – including de-risking funding level triggers and re-risking in March 2020 – put the trustees in the driving seat to achieve their objective much sooner than they had dared hope.”
The Chair of the Trustees commented: “Thanks to everyone involved we were able to move quickly and secure the right outcome for all our members and the company. It’s particularly pleasing because the Trustees and the company were expecting it to take another seven years to get to full buyout. Through Cartwright’s diligent preparation of the member data, proactive and pragmatic investment advice, and relationship with K3, the opportunity was identified and acted on without delay.”
Peter Jennings, Business Development Manager at Just, commented: “We take pride in every deal we complete, but there is something particularly satisfying when clients select you to complete further transactions for them. It’s a strong signal that they like what you do and trust you to get it right for them. So we were delighted the trustees asked us to secure the remaining benefits of the scheme. K3, Cartwright and Just have developed a very efficient method of collaborating that helps us to deliver transactions quickly.”
Legal advice was provided by Shoosmiths.
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