Rothesay Life and CDC Group plc announce 370m pension deal
17th November 2009
Rothesay Life, the Goldman Sachs owned insurer, today announces that it has completed the insurance of £370m of liabilities of the CDC Pensions Scheme. CDC Group plc is the UK government-owned fund of funds investing in private equity funds focused on the emerging markets of South Asia and sub-Saharan Africa. The arrangement is a 'buy-in', where the trustees retain the assets in the defined benefit scheme, and covers all scheme members. The assets used for the transaction are retained by the Scheme, therefore affording a high level of security for the members and are invested in a portfolio of corporate bonds which provide returns to Rothesay Life, sufficient to cover the costs of pensions benefits as they arise.
Addy Loudiadis, Chief Executive of Rothesay Life, said: 'We are delighted to have worked with the Trustees of the CDC Pensions Scheme to develop a bespoke solution which removes the impact of investment underperformance, volatility and longevity. It represents a further extension of the range of products that we can offer to trustees.'
Nicholas Selbie, Chairman of the Trustees of the CDC Pensions Scheme, commented: 'The Trustees, in conjunction with their advisers, and following a lengthy selection process, were attracted by the innovative, secure solution proposed by Rothesay Life. The arrangement meets our objectives of removing the key risks of investment and longevity, insuring our liabilities with a major player in the sector and obtaining collateral. In addition, the commitment of CDC Group plc to the CDC Pensions Scheme is preserved.'
Richard Laing, CDC Group plc CEO, commented: “This is good news for CDC’s current and future pensioners, who can be reassured that their interests continue to be well looked after and that there is improved protection of their benefits under the Scheme. The management of CDC welcomes this news. It means that we can continue to focus on the important business of running the company, ensuring that CDC’s capital continues to support promising businesses in developing countries.”
Notes to the Editors
1. CDC Group plc is the UK government’s development finance institution. It invests, mainly through private equity funds, in promising businesses in the developing countries of South Asia and sub-Saharan Africa.
2. In July, Rothesay Life completed the largest pension buy-in to date with a £1.9bn transaction with the UK pension schemes of RSA Insurance Group plc, covering around 55% of the total current pensioner benefits.
Rothesay Life is an insurance company established in the UK as a wholly-owned subsidiary of Goldman Sachs and is regulated by the FSA.
Rothesay Life aims to provide tailor-made solutions for pension schemes seeking to mitigate their exposure to longevity risk, thereby meeting the requirements of pension scheme members, trustees and corporate sponsors.
Keith Satchell Chairman
Former CEO of Friends Provident plc and a former Chairman of the Association of British Insurers.
Addy Loudiadis Chief Executive
Managing Director at Goldman Sachs, served as the co-head of the Goldman Sachs European Financing Group and co-head of the Investment Banking Group in Europe.
The Goldman Sachs Group, Inc. is a leading global financial services firm providing investment banking, securities and investment management services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centres around the world.
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