On the go: Defined benefit superfund-in-waiting Clara-Pensions has attracted new investment from Wilton Re, as the pensions industry waits for the Pensions Regulator to give either of the two commercial consolidators its blessing.
The investment by Wilton Re Overseas, a division of the global reinsurance group, makes it the second capital backer of the pensions start-up, which has also won funding from Sixth Street Partners.
The financial vote of confidence comes at a crucial moment for the nascent industry. While the regulator has laid out its framework for the regulation of superfunds, both Clara and competitor The Pension SuperFund will need to pass specific checks with the watchdog before they are cleared to begin accepting schemes.
Speaking at Pensions Expert’s DB Week conference series in October, TPR head of policy Fiona Frobisher said the regulator was “positive but cautious” about the prospect for superfunds to improve the security of member benefits.
Aside from both severing the sponsor covenant of DB schemes in exchange for an injection of funding, the two models differ in structure significantly.
While TPSF will aim to run off liabilities from its own balance sheet, Clara aims to be a “bridge to buyout”, transferring members to bulk annuity insurers at a more attractive price point in the future.
Adam Saron, chief executive of Clara-Pensions, said: “Wilton Re’s investment represents a clear vote of confidence in consolidation, TPR’s regulatory regime, and Clara’s member-first model.
“With the combined support of Sixth Street and Wilton Re, now more than ever, I am confident that Clara has the resources required to support members on their journey to buyout. We look forward to completing the regulator’s rigorous assessment and welcoming our first members.”
Chris Stroup, chair of Wilton Re’s board of directors,said: “We have tremendous respect for the work that Adam and his team and Sixth Street have completed thus far in preparing Clara to succeed.
“We’re delighted to invest in Clara’s member-first model and look forward to working further with the Clara team alongside Sixth Street.”
