Shell Closes $4.9B Pension Risk Transfer With Prudential

The pension obligations cover 21,500 of the company's retirees, the first large PRT transaction in the U.S. this year.



Prudential Financial Inc. announced on Wednesday it had closed a $4.9 billion pension risk transfer deal with Shell USA Inc.

The transaction would be the first major pension risk transfer in the U.S. this year, following record years for the pension risk transfer market in 2022 and 2023. 

“Prudential is honored to help continue meeting the retirement security needs of Shell’s retirees,” said Alexandra Hyten, head of institutional retirement strategies at Prudential, in a statement. “We are confident that our commitment to flawless execution—from the transaction itself to participant onboarding and service delivery—will serve Shell retirees well, protecting the lifetime income they’ve worked hard to earn.”

Prudential will take responsibility for making payments to the 21,500 affected Shell retirees beginning May 15. According to Shell’s most recent 5500 filing, the company’s pension fund had 26,536 active participants at the end of the 2022 plan year and 9,299 retired or separated participants entitled to future benefits. At the end of 2022, the plan had assets of $14.468 billion. 

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Including the transaction, Prudential has completed seven of the 10 largest PRT transactions on record, according to the release. These deals include Prudential’s $16 billion pension risk transfer for 100,000 IBM retirement plan participants and beneficiaries in 2022. Prudential innovated the modern pension buyout market with its $25.1 million General Motors deal in 2012.

2022 was a record year for the PRT market, with $48.3 billion in single-premium buyout deals, according to data from S&P Global Inc., showcasing an increased activity in companies transferring pension liabilities to insurers. According to LGRA, the market for PRT deals is projected to be $45 billion in 2023.

Pension risk transfers are also increasing at record numbers in the U.K., where higher interest rates have boosted the funded statuses of U.K. pension plans, leading to an increase in transactions as plan sponsors seek to offload their pension liabilities.

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Texas Permanent School Fund Appoints Stu Bohart as Deputy CIO

Bohart will oversee strategic partnerships and the funds absolute return portfolio.

The Texas Permanent School Fund, the $52 billion, 179-year-old endowment which provides support to public schools in the state, announced on February 1 that it has appointed Stu Bohart as deputy CIO of strategic partnerships. 

Bohart started the newly created position on January 16, according to a spokesperson for the PSF, and will report to Bob Borden, the PSF’s CEO.  

Bohart will be in charge of the fund’s absolute return portfolio, which manages the fund’s investments in hedge funds, direct lending, special situations and co-investment opportunities.  

According to the fund’s 2023 annual report, the PSF’s absolute return portfolio returned 6.79% in fiscal 2023, which ended August 31, 2023, and 6.79%, 5.40% and 4.95% for the last three, five and 10 years, respectively. The absolute return portfolio comprises of 6.0% of the fund’s assets.  

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Bohart has spent much of his career in asset management. Between 1997 and 2010, he held multiple senior roles at Morgan Stanley, including co-head of Morgan Stanley Investment Management and head of the firm’s global prime brokerage unit. Prior to these roles, he was a portfolio manager at Morgan Stanley Investment Management.  

Prior to his appointment at Texas PSF, Bohart was a partner in and president of Fort LP Investment Management from 2018 through 2023. He was also a limited partner representative at venture capital firm Outlander Labs from 2015 through 2023.  

“Stu’s extensive experience in PE, RE, hedge funds and asset allocation will help Texas PSF improve portfolio and operational efficiency across asset classes and deepen our relationships with best-in-class asset managers around the world,” said Borden in a statement.  

“I’m excited to work with Bob and help develop a premier investment platform to support the Texas public school system,” said Bohart in the statement.  

Bohart earned a bachelor’s degree in economics from Northwestern University.  

According to a spokesperson, two of Bohart’s early projects will be to build large strategic partnerships with best-in-class asset management firms and to spearhead the development of an expanded private credit effort.  

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Texas Permanent School Fund Appoints Robert Borden new CEO 

Britt Harris Steps in as Acting CEO at Texas Permanent School Fund 

Texas Constitutional Amendment Creates Endowment Fund for Newer Universities 

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