Last year was “pretty brutal” for defined benefit (DB) pension superfund Clara Pensions, its CEO, Simon True, has said.

True noted that, as Clara is a ‘bridge to buyout’ superfund, the sudden improvements in DB pension funding levels last year meant it was difficult for the superfund to engage with potential clients.

“When you are a bridge to buyout, which is what Clara is, and you’re standing there helping people get from where they are today to journey over five to seven years to help them get to buyout, only to wake up that people were already there, it’s quite difficult to engage with people,” he commented.

“So, we had a pretty tough year last year.”

Clara then engaged with The Pensions Regulator (TPR) in early 2023, with the regulator subsequently updating their guidance in August after consulting with the industry.

“That made it a bit more of a level playing field,” True noted.

“I think the original guidance was set up very heavily influenced to protect the insurance industry for various reasons. I think we have now got a much better position.”

Clara has now built a pipeline and is engaging with £4bn of pension schemes, with True predicting that the superfund will have around 10,000 members within the scheme by the end of this year, and approximately 40,000 members by the end of 2024.

“Am I skipping down the street? No,” True continued. “Because even when I do deal one and we announce it, we would have done one, and that would be a scant return for five years of investment.

“I’m not talking about the monetary investment; I’m talking about the people who set up Clara and those who supported it. Is there a spring in my step? Yes, but I’m not skipping down the street swigging champagne yet.

“I’m bullish that the first transaction will be happening. Once one is done and people understand: ‘What did it entail, what did people have to go through, is there a process established, how supportive were TPR, how difficult is it to write the reports?’ All those questions we will be able to answer hopefully very soon.

“Our solution does not work for everyone, there is a sweet spot.”

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