eFinancialCareers

The hot air surrounding the pensions buyout space is finally turning into substance, and guess what? Hiring looks set to follow.

The buyout market has long been touted as a sector set to explode, but some bumper deals have thrown it into the spotlight. Last week, Rothesay Life, the life insurer wholly owned by Goldman Sachs, secured a £700m deal with leisure retailer Rank Group, and buyout firm Paternoster took on music firm Chrysalis’s scheme, taking its total assets under management to £1.8bn.

According to Paternoster, this is just the tip of the iceberg. It says there are some 10 deals worth over £1bn in the pipeline, and it expects activity this year to quadruple from 2007, rising to £10-12bn.

The number of quoted life insurers in the pensions buyout space has swollen from two – L&G and Prudential – a couple of years ago, to 12 today, says David Ellis, principal at Mercer. Therefore, more firms are vying for a piece of the buyout pie and they are obviously boosting their teams to deal with the increased level of activity.

Following in the footsteps of Goldman, other investment banks and bankers are also getting in on the act. Amelia Fawcett, the former vice-chairman at Morgan Stanley, founded buyout firm PensionsFirst. Deutsche Bank has a £500m stake in Paternoster, and other i-banks are rolling out longevity-only products, such as JPMorgan’s LifeMetrics longevity index, for firms that don’t want to take the total buyout route.

Not surprisingly, there are jobs aplenty. Charlotte Crosswell, partner at the Pension Corporation, says: “There’s a perception that buyout firms can just staff up and go, but it takes a lot of preparation. You need risk managers, asset liability managers, asset managers and actuaries, as well as a good operational team to deal with the swell in new business.”

Nor do the new roles stop there. Ellis predicts demand for advisors to pension fund trustees: “It’s effectively a broking role, carrying out competitive bidding processes for insurance companies. And the new insurance companies are all boosting their pensions and life insurance specialists.”

What’s more, Crosswell says the Pensions Corporation – which has focused on taking over companies with pension funds rather than insurance buyouts – is looking for private equity specialists to assess which firms to invest in.