UK - Watson Wyatt has dismissed fears of a potential conflict of interest arising from its involvement with a new corporate pensions and insurance buyout firm called Synesis Life.

The consulting firm's role in the new venture – one of several new entrants in the market – could put it on both sides of transactions as Synesis seeks to take on the liabilities of clients who may be advised by Watson Wyatt.

"Wariness of potential conflicts is obviously nothing new to our business," said a Watson Wyatt spokesman. "We are always mindful of potential conflicts and we guide our clients as and when they might consider separate advice preferable."

Watson consulting actuary Nick Dumbreck – incoming president of the Institute of Actuaries – will act as the new company's "actuarial function holder", said Synesis chief executive Isabel Hudson.

"It's an outsourcing arrangement with Watson Wyatt," she said in an interview.

The Watson spokesman confirmed that the firm acts as actuarial adviser to Synesis and that it has been helping with its business plan and application to the FSA. He added that Watson consultants act as the actuarial function holder to a number of insurance companies and that this is "normal practice".

Synesis, set up by Hudson and two former Prudential colleagues Mark Duffy and Jay Shah, today announced funding from JP Morgan, Royal Bank of Scotland and Warburg Pincus. It is the latest entrant into the market following the launch of Mark Wood's Paternoster and other firms such as Pearl Group.

"The market is huge," Hudson said. "There is a huge capacity mismatch."

She said Synesis' strategy would vary from that outlined by Wood, her former boss at Prudential. He has focused on enormous economies of scale.

"Our strategy is somewhat different – we are at the bespoke end of the business," Hudson said. "There isn't one product that fits all."

The key would be an "actuarial analysis of the book – not day-to-day administration".

Hudson said the new firm – which is not yet licensed – is in discussion with various potential clients which she declined to name.

The firm would initially target £7-10bn (€10-14.5bn) of liabilities over the medium term.

"The pension landscape is changing significantly and we have made a strategic investment in Synesis in anticipation of these changes," said Ed Giera, head of JP Morgan's global pensions group.

"Synesis fits well with our approach to provide comprehensive solutions to complex risk management problems, and will provide underwriting capacity to allow clients to transfer their annuity and pension liabilities as part of their overall capital and risk management strategies."