Paternoster has been put up for sale, with its original backers facing the loss of more than half their £500m equity investment.
The majority of its backers are seeking an exit from the company set up by former Prudential executive Mark Wood, the Financial Times reports.
Paternoster, which manages longevity, investment and operational risks within defined benefit pension schemes for trustees, was forced to close to new business in the depths of the financial crisis.
It hopes to receive initial expressions of interest by September, according to people close to the situation.
While Paternoster has written no new business since the crisis, its largest shareholder, Deutsche Bank, drew on its expertise to write a £3bn longevity swap for the UK pension fund of BMW in February.
Deutsche, which owns 40% of Paternoster, has said it is committed to supporting the company, according to people with knowledge of the situation, but has not offered to buy out the other shareholders, which are all looking to sell.
These are led by Eton Park, a private equity firm that owns almost 25%, and include hedge funds Polygon, Lansdowne, and Cheyne Capital, as well as Numis and Jupiter, according to people familiar with the company.
Taking the time to look
After 14-month FAS programme
More than half of people over the age of 55 see financial security as a top priority in retirement, yet a third allocate more time to buying a new car, research from Legal & General (L&G) has found.
Rebranded from OMW
Number of benefits