Keyhaven sells PIC for 1.7x return

Katharine Hidalgo
25 November 2020

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Keyhaven Capital Partners has sold Pension Insurance Corporation (PIC) for a 1.7x return.

Keyhaven is drew capital from its Secondaries Fund II, which closed on €244m in December 2017 and held another close on €350m.

The firm is selling its minority stake to a UK-based family office. During Keyhaven's holding period, PIC completed a number of strategic initiatives, including a £750m capital raise and a repositioning of the investment portfolio towards bonds, cash and money markets in order to better address market volatility.

Previous funding
Global private equity firm JC Flowers was one of the founders of PIC, establishing the company in 2006.

CVC Capital Partners acquired a 10-20% stake at an enterprise value of around £2bn in February 2017. The GP drew equity from its $4.4bn Strategic Opportunities Fund to back the transaction.

JC Flowers sold a 21.4% stake in the company to the principal investment arm of Adia in 2018. The sale ended a 12-year holding period for JC Flowers. Adia became the second-largest shareholder in the group after the transaction, behind Reinet with a 43.5% holding.

Keyhaven acquired its stake in February 2017 at a significant discount to embedded value, as the selling shareholders required a liquidity event, according to a statement.

The existing shareholders of PIC provided the business with a £750m round of funding in February 2020.

Reinet Fund, an investment fund incorporated in Luxembourg and PIC's largest shareholder, invested £437.8m to end up with a 46.4% stake. Luxinva, a wholly owned subsidiary of Adia, invested £171.6m and now has an 18.2% shareholding. CVC Strategic Opportunities I deployed £130.6m for a 17.4% shareholding. The majority (60%) of the total funds invested will be available to the company immediately, with the remaining 40% callable upon request before 26 January 2021.

Company
London-based PIC insures UK defined benefit pension scheme liabilities. It was founded in 2006 and recorded profit after tax of £319m in 2019.

People
Keyhaven Capital Partners – Sasha van de Water (managing partner).