Investment Insights: Expanding the toolkit - Buy-ins

Over the last five years a combination of better funding positions, more attractive insurer pricing and more risk aware investment strategies mean that bulk annuity purchases have become an investment option much more worthy of consideration.

In fact, with bulk annuity transactions exceeding £20bn in value, 2018 is set to be a record breaking year in terms of demand for buy-ins and buyouts.

In this note, we consider if bulk annuity purchases should be of interest to a wider group of schemes. Whilst there were 132 transactions in 2017, this is still small compared to the 5,700 UK DB pension schemes, and so are these other 5,500 schemes missing a trick, or does bulk annuity purchase still only make sense in a small minority of cases?

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