Credit firm TPG Sixth Street Partners committed an initial £225 million ($286 million) in financial backing to defined benefit fund consolidator Clara-Pensions, a spokeswoman for Clara confirmed.
The global credit manager, which has $29 billion in assets under management, committed to Clara as its provider of long-term capital. That amount is set to grow to £500 million as the consolidator plan grows.
The backing means Clara, which wants to consolidate at least £5 billion in U.K. corporate pension fund liabilities over the next five years, can now accept its first participants, subject to regulatory approvals, a Clara news release said.
Clara is designed as a transition to insuring pension funds. Under Clara's model, pension fund assets and liabilities are supported by capital provided by both a pension fund's sponsoring employer and its own capital providers.
The U.K. is looking at consolidating some of its pension funds to enhance efficiency and returns.
"Strong, patient capital is key to our model for securing members' pensions," said Adam Saron, CEO of Clara-Pensions, in the release. "Finding the right partner to provide this has been a careful, crucial journey, and TSSP fulfills exactly the criteria we have been looking for. Its track record and commitment to long-term capital investments chime perfectly with Clara's aims."
Spokesmen for and TSSP couldn't be reached.