Citigroup has sold EMI Group’s pension fund to the Pension Insurance Corporation, completing the biggest pension insurance buyout in the United Kingdom.
The transaction covered £1.5 billion (C$2.3 billion) of liabilities and 20,000 members.
The goal of the sale was to fully secure the members’ DB benefits, says Clive Gilchrist, of the independent trustee firm BESTrustees.
“We ran a disciplined process that allowed the trustee and sponsor to achieve their objectives of acquiring all risk cover on competitive terms from a leading provider,” says Swapnil Katkar of Citi’s pension solutions team.
This, he adds, made it possible to “conclude the policy acquisition within five months, ahead of plan, despite the low interest rate environment and volatile market conditions.”
Citi seized control of music company EMI in 2011 after its owner, private equity firm Terra Firma, defaulted on some loans. Citi sold EMI’s recorded music division to Universal Music Group and its publishing division to Sony/ATV. Universal didn’t want to take on the responsibility of the pension fund so the bank held onto the fund.
Read more: