Preparing a DB scheme for buyout with precision and speed

A DB scheme needed to move fast toward buyout. But their platform couldn’t deliver.

The trustees had a clear objective: prepare for buyout within the tightest possible timeframe. Their funding position was strong, and the insurer was ready to engage. But there was a problem.

Their existing platform couldn’t provide the precise gilt portfolio the insurer required. The scheme needed a bespoke basket of direct gilts to match the insurer’s specifications – not a pooled fund, not an approximation. Without it, the buyout would stall or become prohibitively expensive.

Time was critical.

We identified what others couldn’t deliver.

Most platforms don’t offer direct gilt holdings, relying on pooled gilt funds that are often unable to match the exact maturity profile insurers demand for efficient buyout pricing, creating basis risk and often resulting in schemes paying more than necessary.

During initial conversations with the trustees and their advisers, we mapped out the insurer’s requirements in detail. The specifications were precise: a targeted basket of gilts with specific maturities aligned exactly to the scheme’s liability cashflows.

The scheme was already benefiting from our platform’s breadth – access to over 1,000 funds with more than 80 managers, and competitive fees achieved through our investment manager relationships and scale. But for this final journey to buyout, they needed something beyond standard fund access.

The challenge became obvious. So did our advantage. We had infrastructure others didn’t.

A bespoke gilt portfolio built to insurer specifications.

We proposed leveraging our unique capability to purchase and hold direct gilts within our life company structure. This wasn’t about retrofitting an off-the-shelf product. It was about precision engineering.

Our broker/dealer and custodian relationships meant we could acquire the exact gilts the scheme needed and hold them on the platform. This eliminated basis risk entirely and gave the insurer exactly what they wanted for competitive pricing.

The scheme would transition from their existing LDI strategy – selected from our platform’s 100+ LDI funds across 4 managers – into the targeted gilt portfolio in phases, maintaining their hedge throughout while positioning perfectly for buyout. No compromises on risk management. No unnecessary friction costs.

We coordinated the transition with surgical precision.

In partnership with the scheme’s investment consultant and the insurer, we identified the specific gilt lines required across the maturity spectrum. Our team coordinated with brokers to execute purchases at optimal pricing points, managing the transition from existing LDI funds.

The technical challenge was significant. Different gilt maturities had to be acquired at specific moments to capture pricing efficiency, while maintaining liquidity for ongoing scheme cashflows. Our experience with complex DB transitions meant anticipating bottlenecks before they emerged.

Throughout the process, we provided regular progress reports to trustees. Our custodian infrastructure ensured smooth settlement across all transactions, while our platform’s detailed holdings reports gave the insurer complete visibility – critical for their pricing models.

The scheme achieved buyout ahead of schedule. At a better price.

The targeted gilt portfolio delivered exactly what the insurer needed for competitive pricing. The scheme completed buyout faster than anticipated, capturing favorable market conditions that wouldn’t last.

Because the gilt holdings matched insurer specifications with zero basis risk, the pricing premium was eliminated. This delivered meaningful cost savings compared to using pooled gilt funds.

Our direct gilt solution proved its value beyond the numbers. Speed and certainty matter most when buyout windows open unexpectedly.

When precision matters, conventional platforms fall short.

This scheme required infrastructure most platforms simply don’t have. We delivered because we’ve invested in capabilities the market increasingly demands.

The project showcased what becomes achievable when technical infrastructure meets deep buyout expertise. As more schemes move toward endgame, the demand for precision solutions will only accelerate.

We believe we are the only institutional platform to offer a direct gilt purchase solution of this type. For trustees navigating buyout, having the right partner changes everything.