Senior Underwriter

Private credit managers eye UK DB pension funds. * August 21, 2026 * - 10:02 am Private credit managers are increasingly looking to Britain's £1tn-plus defined-benefit pension market as a source of capital, as insurers allocate a growing share of their portfolios to private assets, according to a report by the Wall Street Journal. The trend was highlighted by a new partnership involving Standard Life, CVC Capital Partners, Goldman Sachs and PGIM, under which investors will commit $2bn to private-market assets. Standard Life said the arrangement would support its growing business taking responsibility for defined-benefit pension schemes from their corporate sponsors. The deal is the latest example of investment firms seeking to tap the UK's expanding market for pension risk transfers, creating a new channel through which private credit can ultimately gain exposure to long-term retirement assets. UK defined-benefit pension schemes still have more than £1tn ($1.35tn) of liabilities that have yet to be transferred to insurers, according to Stephen Purves of consultancy XPS. Many of the schemes have been closed to new members for years, but continue to hold substantial pools of assets. The opportunity has grown as higher interest rates reduced the value of pension liabilities and helped many schemes move into surplus. That has enabled more trustees to consider transferring their obligations to insurers through bulk annuity transactions. Once a transaction takes place, the insurer assumes responsibility for managing the pension assets and eventually the associated retirement payments. The long-term nature of those liabilities makes private-market investments particularly attractive to insurers, which can match them against assets such as private loans, infrastructure and real estate. The model has already attracted major private capital firms. Apollo, Brookfield and Blackstone have all expanded their involvement in the UK's pension risk-transfer market over the past year, either through ownership stakes in insurers or by supplying private-market assets. S&P Global estimates that roughly 40% of the assets supporting UK insurers' rapidly expanding retirement businesses are invested in private markets and other assets that do not trade regularly on public exchanges. Around one-third of that private-market allocation consists of private credit, including loans to mid-sized companies. The growing exposure is drawing regulatory scrutiny. The Bank of England has warned that competition for pension business and pressure to maintain profit margins could encourage insurers to take on additional investment risk without receiving sufficient compensation. Offshore structures are also an area of concern. The Bank of England has argued that insurers do not currently hold enough capital to absorb losses associated with some offshore arrangements and plans to increase those requirements. Blackstone, for example, has agreed to supply private-credit investments to Legal & General for its retirement portfolio. One transaction involved financing a grocery distribution centre in North Carolina. Blackstone is also gaining indirect exposure to Britain's pension market through a Bermudian reinsurer to which it provides private-credit assets. Brookfield has taken a different route, acquiring life insurer Just Group and planning to support its portfolio with investments in infrastructure, energy and real estate. Apollo has made an especially significant push into the sector through Athora, the European insurer in which it holds a minority interest. Athora recently acquired Pension Insurance Corporation, a specialist in taking over corporate pension schemes. The combined business has around £118bn in assets serving approximately 3.1 million savers and retirees. Athora expects its relationship with Apollo to provide Pension Insurance Corporation with access to private-credit assets originated by the US investment firm, with a significant portion expected to be denominated in sterling to match the insurer's UK liabilities. The strategy is already contributing to growth in Apollo's asset-management business. Apollo reported an additional $65bn of fee-paying assets under management in the second quarter, driven in part by Athora's acquisition of Pension Insurance Corporation.

PGIM strikes deal to buy about $3 billion of GreenSky loans. PGIM has committed to a three-year forward-flow facility with GreenSky that is expected to result in about $3 billion of consumer home-improvement asset purchases. Published August 20, 2026 · 1:22 PM ET PGIM has agreed to a three-year forward-flow arrangement with GreenSky, LLC and certain affiliates that is expected to result in roughly $3 billion of purchases of consumer home-improvement assets. The deal gives GreenSky a committed source of capital for loans generated through its point-of-sale financing program while expanding PGIM's exposure to private asset-based finance. The $3 billion figure is a forecasted total purchase volume over the life of the facility, not an upfront payment for a single existing loan portfolio. PGIM described the arrangement as a forward-flow facility, a structure designed to let qualifying assets move to an investor as they are originated over an agreed period. PGIM said Thursday the collateral pool is expected to consist of prime consumer home-improvement assets originated and serviced through the GreenSky Program. The asset manager said the arrangement is intended to give GreenSky long-term committed capital while adding a consumer-credit stream to PGIM's growing asset-based finance business. GreenSky gets a committed buyer for new home-improvement assets. GreenSky operates a technology and servicing platform used by banks to provide financing through home-improvement merchants. The company itself is not the lender. Its program connects consumers, contractors and participating financial institutions, allowing borrowers to finance projects such as roofing, remodeling, HVAC work, windows, pools and other home improvements at the point of sale. That distinction is important to the structure of the PGIM deal. GreenSky says federally insured, federal and state-chartered banks originate loans through its program, while GreenSky provides the technology and program administration. The new PGIM facility is therefore a capital-market arrangement around assets generated by that lending network rather than a conventional corporate loan made directly to GreenSky. PGIM said the GreenSky Program has financed nearly $70 billion of commerce for almost 6 million consumers since inception. GreenSky also describes its home-improvement operation as a nationwide platform serving merchants that want to offer financing to customers during the sales process. The scale of that origination channel is one reason a multi-year purchase commitment can be meaningful even though the announced $3 billion is spread across future production. A multi-year forward-flow commitment can give GreenSky more predictable takeout capacity than relying solely on individual portfolio placements, provided the loans meet the agreed eligibility and underwriting standards. PGIM did not disclose pricing, yields, loss assumptions, purchase discounts or detailed credit criteria, so the economics of the arrangement cannot be assessed from the announcement alone. PGIM is pushing deeper into asset-based finance. For PGIM, the GreenSky facility is part of a broader expansion in private asset-based finance. PGIM is the global asset management business of Prudential Financial and reported $1.5 trillion of assets under management as of June 30, 2026. Its securitized products platform had grown to $175 billion and sits inside a $1.2 trillion credit investment platform, according to the company. The GreenSky commitment follows another large housing-related financing initiative announced earlier this year. In May, PGIM and Domain Real Estate Partners said they had surpassed $4 billion of U.S. land-banking transactions, a form of financing used to support residential land acquisition and development. Together, the two arrangements show PGIM deploying private credit at different points in the housing chain, from land used by homebuilders to consumer financing for improvements to existing homes. PGIM's asset-based finance business covers credit backed by identifiable pools of assets and contractual cash flows rather than relying only on the unsecured credit of a corporate borrower. Consumer loans are one part of that market. The firm also invests across residential mortgage credit, commercial assets and other securitized or privately originated exposures. The appeal for institutional investors is not simply that the loans are tied to housing-related spending. The structure can provide access to a large number of individual consumer obligations with defined payment schedules, allowing credit risk to be evaluated at the pool level. PGIM said the GreenSky assets have a prime credit profile, but the announcement did not provide average borrower scores, loan sizes, maturities, delinquency rates or historical loss performance for the specific pools expected to be purchased under the facility. That missing detail matters because home-improvement loans remain consumer credit. Performance can still be affected by employment, household cash flow, interest rates and broader economic conditions. PGIM's announcement describes the pool as consumer home-improvement assets rather than residential mortgage credit. The deal links private credit growth to an aging U.S. housing stock. PGIM is also framing the investment around the long-term need for spending on existing homes. Oliver Nisenson, PGIM's head of private asset-based finance, said the firm views home-improvement lending as an attractive segment within consumer credit and pointed to aging U.S. housing stock as a driver of spending on repairs and infrastructure. GreenSky's model is positioned directly at that spending decision. Consumers typically encounter financing when arranging a project through a participating merchant, and approved borrowers can use their GreenSky account to fund the contractor or service provider. This creates a stream of installment loans tied to specific household projects rather than general-purpose consumer borrowing. The arrangement does not mean PGIM is acquiring GreenSky or taking ownership of the lending platform. It is committing capital to purchase eligible assets generated through GreenSky's program over three years. GreenSky remains the technology and servicing platform, participating banks remain responsible for making the loans, and PGIM becomes a long-term institutional buyer of part of the resulting credit production. PGIM also did not say that the full $3 billion is guaranteed to be purchased. Its announcement uses a forecasted total purchase volume of approximately $3 billion, which leaves actual deployment dependent on the amount and characteristics of loans produced under the facility. The absence of disclosed pricing and credit thresholds also means investors do not yet have enough information to calculate the return PGIM expects from the assets. For GreenSky, the immediate benefit is committed funding capacity that can support continued loan production. For PGIM, the facility adds another channel for privately originated consumer credit as the manager expands an asset-based finance platform that already spans housing and other securitized markets. The next meaningful measure of the deal will be the pace and quality of assets actually delivered into the facility, rather than the headline $3 billion forecast by itself.