Pension superfunds need help to avoid early retirement
Nobody said it would be easy. For the pension industry’s new generation of consolidation vehicles, getting out of the starting blocks is turning into a protracted affair.
The two to have shown their hands so far – the Pension Superfund and Clara-Pensions – have impressive boards, promises of funding and bulging deal pipelines, yet months after their respective births, they have little to show for it.
One early target for both Clara, backed by money affiliated to buyout giant TPG, and the PSF – co-founded by City financier Edi Truell – has been Debenhams.
People close to the ailing department store chain’s pension trustees say they have held detailed discussions with both vehicles in recent months.
Under their plans, Debenhams’ £1bn retirement schemes – which are in collective surplus – would transfer to a consolidator before being pooled with those of other corporate sponsors.
The talks appear to have stalled, however. A spokesman for the Debenhams Pension Schemes said: “Ensuring that members’ benefits are protected is the trustees’ top priority, and we constantly review the best way to deliver this. However, we are not in negotiations with a consolidator and we have no current plans to enter into such an arrangement.”
Nor is the wider regulatory environment proving auspicious for the consolidators. Last week, the new boss of the pensions lifeboat expressed concern about some aspects of their structure.
More obviously, pension insurers whose turf is under threat from Clara and the like are also lobbying fiercely against the superfunds on the basis that policyholder protections risk being weakened.
Nevertheless, the government has started a useful debate at a time when the strains on funding the defined benefit system have become ever more apparent.
The merits of superfunds’ economics are obvious. Swift action is needed if these potentially valuable entrants to the pensions landscape are to avoid being retired as firmly as those whose retirement benefits they’re designed to pay.
McLaren zooms up the grid
Consider the list of the most exciting initial public offering prospects for the London market in the next five years and it’s likely that McLaren Group features prominently on it.
Best-known for its Formula 1 team, whose stuttering performance in recent years finally looks to be improving (McLaren sits fourth in the F1 Constructors’ Championship), its supercar business has provided a further catalyst for revenue growth.
Today, its McLaren Racing division will aim to inject further momentum into its sporting operations by announcing the appointment of Mark Waller as managing director of its sales and marketing operations.
Waller joins from the NFL, where he has helped drive significant revenue growth outside the US during his decade in senior gridiron commercial roles. He will be the latest recruit to a team that under chief executive Zak Brown is outperforming most of its rivals – off the track, at least.
Yesterday, Arrow Electronics was added to a roster of partners which has recently grown to include British American Tobacco and Dell.
F1’s rate-cards might not be what they once were but Brown’s injection of pace into a once-tired commercial operation should augur well for a future move to the public markets.
Poached heads
For Barclays, read HSBC; and for JP Morgan, read Royal Bank of Scotland.
Executive poaching is a fact of corporate life, but it rarely takes place in the sorts of clusters being seen in UK banking.
Jamie Dimon, JP Morgan chairman, was unamused by the number of senior managers taken by former colleague Jes Staley after he became chief executive of Barclays.
I suspect Sir Howard Davies, RBS’s chairman, might be of a similar mindset.
The latest in a string of executives to swap the state-backed lender for HSBC took place this week when Aileen Taylor resigned from RBS.
Ewen Stevenson, the Canary Wharf-based bank’s new chief financial officer, is the most senior figure to have made that journey, but HSBC’s human resources and investor relations chiefs also fall into the same category.
Time for Sir Howard to pick up the phone and have a word with his opposite number?