UK - Pension buyout firm Paternoster has today announced its assets under management (AUM) increased by 21% in the third quarter of this year.

"At September 30, the total value of assets transferred to Paternoster was £406m," the company announced in a news release.

Paternoster chief executive officer Mark Wood, Prudential's former UK CEO, commented that the buy-out market is growing rapidly: "On average, in the first half of the year, we provided quotations on £2bn worth of business each month," he said.

He added: "Subsequently, July saw £3.5bn of business being quoted on, August £4.6bn and September £4.9bn."

According to Wood the volume of quotations suggests in 2007 the market for defined benefit (DB) risk transfer could grow by between 200 and 300% over 2006.

"Both company sponsors and trustees are increasingly recognising the merit of securing the promise to pay pensions through the backing of a regulated insurance company," said Wood.

In November last year, Paternoster announced its first client, when taking on the £11.5m in assets and estimated £14m in liabilities of the final salary scheme of underwriting agency Cuthbert Heath.

Since then, the company has bought a total of 23 DB schemes in the UK, a Paternoster spokeswoman told IPE today.

Last month, consultancy firm Aon said that too few pension schemes see buyout as realistic and affordable for the buyout market to reach the widely-predicted boom.

The study, which collected data regarding cases placed and quotations obtained direct from the leading providers in the buyout market, shows over the first six months of this year there was little sign of increased volumes of buyout cases being placed.