Pubs, bars and restaurants group Mitchells & Butlers (M&B) – and owner of All Bar One in the UK – has completed a £1.2bn bulk purchase annuity (BPA) transaction with Standard Life covering around 20,200 members.
The BPA arrangement transacted in May, which covered the plan’s deferred and pensioner members, follows a previous £650m buy-in deal for the Mitchells & Butlers Executive Pension Plan with Legal & General at the end of 2021.
XPS Pensions Group acted as the lead adviser to the trustees for the new transaction, while Gowling WLG provided legal advice.
Jonathan Duck, chair of the trustees of the M&B pension plan, said: “The Trustees are very pleased to have concluded a full buy-in with Standard Life, following a period of strong investment performance and continued support from M&B plc, the plan sponsor.”
He added that the scheme advisers – XPS Pensions Group and Gowling – alongside Standard Life, also displayed “great flexibility in structuring the transaction in such a way that buy-in has been possible several years earlier than anticipated”.
He said: “Both the M&B Pension Plan and M&B Executive Pension Plan are now secured with buy-in policies, a great resolution to the historic challenge of past pension deficits.”
Rhian Littlewood, senior business development manager at Standard Life, added: “Throughout the process, we worked closely with the trustees on a clear strategy and an innovative solution to help manage the sale of illiquid assets, which was crucial to the success of this transaction.”
He continued: “This transaction demonstrates how innovation, good planning and co-operation between all parties can help facilitate a positive result.”
LGIM launches fossil-fuel exclusion fund for chairites
National Trust, the charity, has joined forces with Legal & General Investment Management (LGIM) to develop a bespoke fossil-fuel exclusion strategy.
Fossil Fuel Exclusion Index Fund will launch with “significant” initial seed funding and will be open to UK investors including charities and endowments, platforms and wealth managers, it was announced.
The fund seeks to offer investors UK and global equities exposure as well as LGIM-designed ESG indices.
It will prioritise companies with better ESG ratings and limit exposure to companies associated with poor ESG practices.
To be included in LGIM’s index structure, companies must meet minimum global criteria and companies with a carbon reserve intensive above 0% will be excluded. This includes fossil fuel companies in the energy, mining and utilities sectors.
The strategy also incorporates LGIM’s Climate Impact Pledge, focused on speeding up the progress companies are making in addressing climate change and transitioning to a low-carbon economy.
In 2022, LGIM identified over 5,000 companies in 20 climate-critical sectors and ranked them against criteria such as their commitment to the net-zero transition, board composition, strategy and transparency.
Dabinder Hutchinson, director of finance at the National Trust, said: “As Europe’s largest conservation charity, the National Trust exists to protect nature, beauty and history for everyone, forever.
“Our environmental values are important in everything we do, including managing our investment portfolio – something that is crucial to ensuring we are able to generate vital funds to fulfil our charitable purpose.”
Mark Johnson, head of institutional clients at LGIM, said: “We believe the transition away from fossil fuels towards a low-carbon economy is a key priority for investors. We are seeing demand from charities and universities to divest from fossil fuels, as they respond to expectations from increasingly sustainability-conscious donors and students.”
He added that the partnership with National Trust reaffirms LGIM’s purpose to use its scale and expertise in indexing and investment stewardship to provide innovative, cost-effective portfolio solutions for charities and institutions.
Qantas Airways scheme completes £40m buy-in with PIC
The Qantas Airways Retirements Benefits Scheme has completed a £40m buy-in with Pension Insurance Corporation (PIC), as part of a long-term partnership.
This is the second buy-in completed by the scheme with PIC. The first buy-in, for £25m, took place in 2018.
The second deal is a full buy-in with the remaining 62 current pensioners and 168 deferred members covered.
PIC has completed more than 75 repeat transactions with existing trustee clients, covering £15bn of liabilities and the pensions of more than 90,000 scheme members.
Qantas Airways trustees were advised by Aon, with legal advice from Eversheds Sutherland and Reed Smith LLP in relation to benefits. PIC, meanwhile, received advice from Rachel Pinto, pensions partner at Herbert Smith Freehils.
Bojan Jokovic, chair of the trustees, said: “This is part of a long-term de-risking strategy led by Aon over the past five years which has allowed us to complete this transaction despite the current uncertainty in the markets. PIC was flexible in helping us achieve our aims and I want to thank them and the scheme’s advisers for their hard work.”
Mitul Magudia, head of business development at PIC, said the transaction emphasised how smaller schemes can access competitive insurer pricing with attractive terms if they prepare and approach the market in the right way.
He added: “We have the flexibility and scale to offer solutions to well-prepared schemes of all sizes that approach the market using well-governed processes.”