(Reuters) -British insurer Phoenix Group said on Wednesday that it is in talks for a potential third-party partnership to scale up its pension-risk transfer (PRT) operations, as it seeks to capitalise on growing demand in the sector.
The PRT business takes on pension liabilities from companies looking to offload their retirement schemes. It has become a key growth driver in the insurance industry as firms increasingly seek to shift the liability off their balance sheets.
A potential deal could strengthen Phoenix’s ability to compete for larger and more frequent pension buyout opportunities. The company is the UK’s largest long-term savings and retirement group.
Phoenix, in an email, told Reuters that discussions are at an early stage and there was no certainty that it would result in a transaction. It did not disclose the name of the parties involved or the deal value.
The potential capital raise was first reported by the Financial Times on Wednesday. It said that Phoenix held talks with private equity firms, including Blackstone, Sixth Street and KKR, for a potential 1-billion-pound ($1.34 billion) deal.
The three private equity firms did not immediately respond to Reuters emails seeking comment.
Legal & General, another insurer offering life insurance, pension and investment products, won a 4.6-billion-pound ($6.17 billion) pension liability buy-in from U.S. carmaker Ford earlier this month.
In September, Phoenix announced a rebrand of the company as Standard Life and a pivot to in-house management of annuity-backed assets.
($1 = 0.7451 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Harikrishnan Nair)
