UK - UK pension buyout firm Paternoster added another four pension schemes to its business in the first weeks of the year, bringing its total number of schemes to 33, IPE has learnt.
Paternoster's head Mark Wood, who was chief executive of the UK and European operations of Prudential until October 2005, told IPE in an interview today the company added three more UK defined benefit schemes to its portfolio only last week.
He declined to reveal which schemes had been added, though said he expects 2008 to be a similarly successful year as 2007 has proven to be.
"The economic environment in 2007 for us was pretty much perfect, " said Wood, adding: "Many FTSE350 pension schemes moved to a position where the deficit or the amount of money that needed to be added to fund the scheme to buyout reduced very materially." He expects this trend to continue this year.
Private equity and companies going through restructuring are also an important component in the development of the business, said Wood.
"A lot of the transactions that we have been involved in have been either private equity companies, or companies that going through some form of restructuring, so if there is a major acquisition or a major disposal, or a recapitalisation of the group, a new parent has acquired the company, or private equity is reorganising the company, this is often a stimulus to look at every element of the balance sheet," explained Wood,
A few of Paternoster's clients have been continental European clients, along with two Scandinavian parent companies, who, after acquiring a UK business, sold the pension fund.
Wood also said Paternoster may also venture into alternative investments such as hedge funds and private equity investments as the company further develops.
Though Paternoster currently only outsources its custody to State Street, and uses only a few specialist investment advisers, the company is considering the option of employing external managers for specialist mandates.
"Eventually, with scale, we will need to employ specialist investment managers," said Wood.
He added: "We have a very vanilla investment strategy, which is about matching cash flows, so we are building a AA-rated bond portfolio, we have a lot of cash, and we have quite a few government securities, gilts, so there is very little that is sophisticated."