UK-based Clara-Pensions superfund is poised to launch a new private markets investment vehicle.
Expected to be registered shortly, the Clara Private Markets Vehicle has been created in conjunction with Van Lanschot Kempen Group which will manage the fund.
It will invest across a range of private markets, focusing initially on private credit. Longer term, the vehicle will also consider other assets such as infrastructure debt and real estate debt. Approximately 30-35% of Clara assets will be held in private markets, with a “significant proportion” of these invested in the UK, the superfund said.
While pension schemes typically spend between five and 10 years inside Clara before transferring to an insurer, the private markets vehicle has been designed to invest beyond this time horizon, taking advantage of Clara’s benefits of scale and the ability to redeploy assets to incoming schemes, it added.
As a result, schemes that join Clara may be able to transfer their existing illiquid assets, rather than being forced sellers as would be the case when transferring cash and Gilts to an insurer.
When schemes subsequently exit Clara to join an insurer, the units in the private markets vehicle can be reallocated to the existing and incoming sections within Clara.
The superfund explained that this approach gives Clara the ability to invest with a multi-decade time horizon, significantly increasing its ability to generate strong risk-adjusted returns in a range of productive assets.
Simon True, chief executive officer at Clara-Pensions, said: “Our mission at Clara continues to be to improve member outcomes and provide a secure bridge to an insured future. We believe that a significant, well-managed private markets portfolio within our investment strategy delivers on these aims, and can also play a significant role in driving economic growth and productivity in the UK.”
He noted that Clara’s role as a superfund has always supported the UK economy by “taking away the cost and distraction of legacy pension schemes, allowing British businesses to focus on their core operations safe in the knowledge that their members are on a secure journey to buyout”.
“By adding private markets investment, we can now further increase our contribution to the UK economy,” he added.
Andre Keijsers, CEO at Van Lanschot Kempen Investment Management UK, said: “The UK pensions industry continues to be characterised by a period of change and innovation – more so now, than we have seen in the past decade. Today represents another first for the superfunds industry, enabling access to a professionally managed, well-diversified private markets portfolio at scale.”
Frank Oldham, trustee director at IGG, as chair of the joint investment working group of Clara, said the move would give Clara ”the capability to invest into private markets in a more efficient way than we have been able to previously”.
Clara’s most recent transaction was with the Wates Group that saw 1,500 members and their £210m of assets transfer into the superfund. This marked the first superfund transaction with an active sponsoring company, and the third transaction Clara has done to date, following its transactions to support the members of the Sears and Debenhams pension schemes.
Following this transaction, Clara now looks after 21,000 members and over £1.5bn in assets. Interest in transacting continues to be high, according to Clara, with the superfund saying it is currently in active discussions with a large number of schemes with total assets in excess of £10bn.
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