Key Takeaways
- • Standard Life's new PRT partnership with CVC Capital Partners, Prudential Financial, Goldman Sachs and MS&AD Insurance Group carries an initial commitment of up to £2bn over five years, with Standard Life contributing £500m and retaining full operational control.
- • Standard Life runs two books: a £42bn shareholder annuity-backing portfolio that originates and invests directly in matching adjustment-eligible assets, and a £275bn defined contribution and savings book that allocates to third-party managers.
- • Standard Life sources 70% of its private credit origination directly and 30% through managers, with the new partners expected to feed the manager channel to improve BPA pricing.
- • The insurer is stepping back from vanilla US private placements as spreads tighten, shifting toward club and bilateral deals sourced early through its GP network.
- • Solvency UK's new "highly predictable" asset category is opening structured credit to the annuity book, including public CLOs, feeder financing and private mid-market CLOs.
Summary
Standard Life's head of private markets and alternatives, Cecile Retaureau, told Alternative Credit Investor that the insurer's new pension risk transfer partnership, Standard Life PRT Solutions, is designed to expand its PRT business into the largest and most complex defined benefit schemes. The partnership brings in CVC Capital Partners, Prudential Financial, Goldman Sachs and MS&AD Insurance Group, with an initial commitment of up to £2bn drawn over five years. Standard Life contributes £500m and retains full operational control. Retaureau said the deal flow accompanying the managers is as valuable as the capital, since better assets support sharper BPA pricing in a market she described as extremely competitive.
The firm operates two distinct books. The shareholder side holds £42bn of annuity-backing assets, largely originated in-house for matching adjustment eligibility. The policyholder side is a £275bn DC and savings book that allocates to third-party managers. Within private credit origination, 70% is done directly and 30% through managers. Retaureau said Standard Life is agnostic between direct and manager-sourced execution, seeking the best-in-class transactions without diluting the risk profile of the book.
On the annuity side, Standard Life is stepping back from the vanilla US private placement market as spreads have tightened and syndicated deals have become crowded. It is instead pursuing small club and bilateral transactions, engaging sponsors before deals reach syndication through its GP network. In real assets, the firm is focused on energy, housing, digital and defence, with defence exposure limited to supply-chain opportunities.
Structured credit is an emerging priority, enabled by the Solvency UK reforms and the "highly predictable" asset category. Retaureau said most public CLOs would now qualify, and the firm is implementing the platform changes needed to hold them. It is also developing a private CLO backed by European mid-market loans, which typically hold around 40 loans compared with hundreds in broadly syndicated CLOs. She said the firm currently engages only the top 10 European and top US direct lenders for such bespoke structures.
On the DC side, Standard Life backs only top-quartile managers in direct lending and is waiting for further spread widening before increasing senior direct lending exposure, while favouring capital solutions in the interim. Retaureau noted the market has already become more lender-friendly and said stronger covenant packages would make increased allocations more attractive.
The firm operates two distinct books. The shareholder side holds £42bn of annuity-backing assets, largely originated in-house for matching adjustment eligibility. The policyholder side is a £275bn DC and savings book that allocates to third-party managers. Within private credit origination, 70% is done directly and 30% through managers. Retaureau said Standard Life is agnostic between direct and manager-sourced execution, seeking the best-in-class transactions without diluting the risk profile of the book.
On the annuity side, Standard Life is stepping back from the vanilla US private placement market as spreads have tightened and syndicated deals have become crowded. It is instead pursuing small club and bilateral transactions, engaging sponsors before deals reach syndication through its GP network. In real assets, the firm is focused on energy, housing, digital and defence, with defence exposure limited to supply-chain opportunities.
Structured credit is an emerging priority, enabled by the Solvency UK reforms and the "highly predictable" asset category. Retaureau said most public CLOs would now qualify, and the firm is implementing the platform changes needed to hold them. It is also developing a private CLO backed by European mid-market loans, which typically hold around 40 loans compared with hundreds in broadly syndicated CLOs. She said the firm currently engages only the top 10 European and top US direct lenders for such bespoke structures.
On the DC side, Standard Life backs only top-quartile managers in direct lending and is waiting for further spread widening before increasing senior direct lending exposure, while favouring capital solutions in the interim. Retaureau noted the market has already become more lender-friendly and said stronger covenant packages would make increased allocations more attractive.
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