UK insurance firm Legal & General (L&G) has entered into a partnership with insurance firm Lifetri, which is owned by private equity firm Sixth Street, to co-finance future buyout deals with pension funds that do not want to make the transition to the new defined contribution (DC) system.

Under the new partnership, “L&G will support Lifetri as it expands to write further Dutch pension risk transfer (PRT) business for defined benefit (DB) arrangements,” the two firms said in a joint press release.

L&G expects the ongoing Dutch pension transition from DB to DC “to result in a substantial number of pension funds seeking insurance solutions in the coming years to support the transition of pension arrangements into insurance-based, capital-backed guarantees for members,” said Andrew Kail, chief executive officer of Legal & General Retirement Institutional.

So far, however, few buyout deals have been concluded in the country. Last year, there was just one new contract, with the closed Dutch pension fund of A.C. Nielsen making a deal with Zwitserleven to guarantee benefit payments for its members into perpetuity.

So far, Lifetri has only concluded one buyout deal when it guaranteed about €850m of pension benefits of Pensioenfonds Allianz back in 2020.

L&G, which is now a minority shareholder in Lifetri, will participate in all the deals in the current pipeline, Lifetri CEO Philippe Wits told IPE.

Wits emphasised the long-term nature of the partnership between the two firms. He said: “We do not immediately need L&G’s additional financing capacity for our existing pipeline of several billion euros. But L&G can take part in any future buyout deals we make if they want to, though this will not immediately be at a high percentage.”

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