The Wolseley Group Retirement Benefits Plan’s recently published Annual Report for the Year Ended 30 April 2025 details a significant shift in its investment strategy, culminating in a full buy-in with Aviva Life & Pensions UK Limited.
Strategic Asset Allocation Shift to De-risk and Prepare for Buy-in
During the fiscal year 2025, the Plan executed a strategic shift in its asset allocation to align with a target Gilt price lock portfolio, in preparation for a full Plan buy-in and transfer of assets to Aviva Life and Pensions. This involved operating the Insight LDI portfolio on a care and maintenance basis, with the Investment Manager Agreement (IMA) with Insight adjusted on March 19, 2025, to focus on targeting a Gilt lock portfolio. (Page 10)
Liquidation of Credit and Private Market Holdings
Throughout Q1 2025, the Plan systematically liquidated its credit and private market positions. This included:
- The unwinding of the Plan’s synthetic credit exposure, via Credit Default Swaps (CDS), during Q1 2025. Profit proceeds were reinvested into the LDI portfolio. (Page 10)
- The liquidation of Insight Buy and Maintain Credit holdings in two tranches on February 11, 2025, and February 18, 2025. Proceeds were reinvested into the LDI portfolio, and interest rate swap positions offsetting credit holdings were closed out. (Page 10)
- Total redemption of the Plan’s Insight Global Asset Backed Securities (ABS) holdings throughout Q1 2025, with proceeds reinvested into the LDI portfolio. (Page 10)
- The sale of the Mercer PIP VI fund in the secondary market, amounting to £73.4 million, executed on February 26, 2025. (Page 10)
- Total redemption of the Absolute Return Fixed Income (ARFI) was implemented on February 26, 2025. (Page 10)
All proceeds from these sales were reinvested into the Plan’s LDI portfolio to de-lever and maximize physical Gilts exposure, aligning with the target price lock. (Page 10)
Manager Appointments and Disappointments
Mercer Global Investments Management Ltd ceased to be an investment manager as of February 26, 2025. (Page 3)
Bulk Annuity Provider Appointment
Aviva Life & Pensions UK Limited was appointed as a Bulk Annuity Provider on September 9, 2025. (Page 4)
Post-Year End Full Buy-in with Aviva
In September 2025, subsequent to the fiscal year-end, the Trustee entered into a buy-in insurance policy with Aviva Life & Pensions UK Limited. This policy covers the liabilities of the remaining Plan members, effective September 9, 2025. The purchase was funded by an in-specie transfer of the Plan’s holdings with Insight, supplemented by an additional £41.2 million contribution from the employer, primarily used to unwind the residual repo position with Insight. The initial agreed price for the buy-in was £571.8 million as of February 21, 2025, adjusted to the transaction date. The total value transferred to Aviva for the annuity purchase was £560.9 million, with payments made between September 11, 2025, and September 23, 2025. (Page 31)
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