Edmund Truell, co-founder of UK private equity firm Duke Street Capital, has sold a large proportion of his 30 percent stake in the firm.
Truell has sold his shares to the partners at Duke Street, and will use the proceeds to fund Pension Insurance Corporation, the company he founded last year.
Truell told PEO: “After I started the Pension Insurance Corporation I felt a moral obligation to [Duke Street] investors to make sure the funds I was involved in were safely home for profit.”
This has been achieved thanks to a series of strong exits. Truell cited as examples the sale of insurance company Equity Insurance Group in 2006 to IAG of Australia for £750 million (€1.1 billion; $1.5 billion), and of health club Esporta to property entrepreneur Simon Halabi for £450 million.
Truell explained: “I’ve always had a rather soggy attitude that employees should be shareholders in their company, so we have given shares to 44 employees. This is an opportunity for those employees to increase their stake.”
Truell said his new venture would be working with the major buyout firms in problematic deals to insure pension schemes against the potentially lengthy lifespans of their members. This would mitigate against the risk of members losing their pensions as a result of a private equity takeover.
Pension schemes have become an increasingly significant stumbling block in large buyout deals. A CVC-led consortium failed to reach agreement with trustees over a sum to cover the pension deficit at retailer Sainsbury’s, while Kohlberg Kravis Roberts’ Alliance Boots bid was almost derailed when the company’s pension plan board asked for £1 billion to cover employees’ pensions. Australian bank Macquarie’s proposed changes to the final pension scheme also attracted the ire of trade unions following its takeover of Airwave, a police radio business.
Truell’s pension insurance company has a stated objective to insure £20 billion of assets.
Duke Street Capital currently has £2 billion under management. Truell co-founded the firm in 1988.