PRUDENTIAL’S new chief executive said yesterday that he was considering buying up ailing pension funds, just a day after Marconi revealed that it wanted to offload its £2.4 billion scheme.

Mark Tucker, the new Pru boss, when asked if Britain’s thirdlargest insurer would join a burgeoning market in buying final salary pension schemes, said that he was “looking at different options across that space”. “We have the financial experience to look at many different variations in the pensions sector,” he said.

It emerged on Tuesday that Marconi had appointed Morgan Stanley to help to dispose of its pension scheme following the £1.2 billion sale of the British telecoms equipment maker to Ericsson, the Swedish group.

Although Ericsson bought most of the company, it refused to take on Marconi’s liabilities to 38,000 pensioners and more than 30,000 deferred scheme members, forcing Marconi to hive off the scheme into a smaller company called Telent. Under the terms of the deal, Telent put £185 million of the Marconi purchase price into the pension scheme and set aside a further £490 million for future payments.

But Telent hopes to shed the liability and access the £490 million by selling the fund to a third party in a deal similar to the sale of closed life funds by insurers.

Morgan Stanley is believed to be keen to persuade a reinsurer to take on the Marconi fund. Swiss Re, the world’s secondlargest reinsurer, owns Admin Re, a closed-life fund consolidation company that has bought the Life Assurance Holding Company (LAHC) and the closed business of Zurich Life in the UK. A spokesman for Swiss Re said that Admin Re already owned some closed final salary schemes, which were held within LAHC at the time of its purchase for £333 million in July last year.

Marconi’s advisers are understood to fear that insurers such as the Pru would be too expensive in a pension-scheme sale. But Philip Broadley, Prudential’s financial director, said strong brand, fund management and payroll abilities and knowledge of mortality made it a prime contender in emerging areas of pensions business. The Pru, one of Britain’s two leading bulk annuity providers, has a payroll of more than a million and is notified of one in every four deaths in the UK.

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