Pension Insurance Corporation (PIC), a £49.6bn (€57.2bn) insurer of defined benefit pensions, is entering the US private placement market via a $60m (€50m) mandate awarded to Macquarie Asset Management.
According to PIC, it has invested in secure, long-term privately-sourced debt since 2012, but nearly all of its investment in this area so far have been in the UK, with a limited proportion in Europe.
In a statement, it said the appointment of Macquarie would allow the insurer to invest in new issuers, sectors and across new geographies, “which will diversify the portfolio and provide better risk-adjusted returns, helping trustees more easily secure the pensions of their scheme members”.
Rob Groves, chief investment officer at PIC, said: “The US private debt market offers a strong supply of high-quality investment grade credits.
“We already have a large allocation in our portfolio to US listed debt and we have recently appointed Wellington Management to oversee our growing US municipal bond portfolio, so this appointment is a natural complement to that strategy.”
Allen Twyning, head of debt origination at PIC, said: “We have worked together to put in place a clear mandate that helps fulfil PIC’s key objective, which is to provide security for our policyholders through sensible sustainable investment into sectors that make sense on a long-term basis for society.”
From Macquarie’s perspective, the PIC mandate represents it bringing its US private placement capabilities to the European market.
PIC now guarantees the benefits of 273,500 pensioners. In 2020 its portfolio grew by £8.7bn, following transactions worth £5.6bn, including with the Old British Steel Pension Scheme, the Co-op Pension Scheme and the Merchant Navy Officers Pension Fund.
Investments it has made this year include top-up debt financing of a Spanish solar park owner, Q-Energy