Investment Focus

Summary

We believe that the current market backdrop lends itself to a growing self-invested pensions market.

Favourable macroeconomic trends and the evolution of the pension industry is driving a growing demand for personal pensions (including SIPPs). Across these macro trends the Company directors believe the SIPP market will play a key role in supporting the needs of underlying customers. The total SIPP market assets under administration is expected to grow at an 8% CAGR over the next 5-years from c.£500 billion to c.£750 billion.

Regulatory pressure, underpinned by a push for higher levels of consumer duty care, as well as vendor needs are driving the sector to actively consolidate. Life companies and platforms account for over 80 per cent. of the "Simple" SIPP market, but the "Full" SIPP market - serviced by specialist firms - is much more fragmented. The fragmented supply side of the SIPP market creates a structural opportunity for inorganic growth.

Opportunity to build UK’s leading specialist pensions administration business

The Company's objective is to build the UK’s leading specialist pensions administration business offering SIPP and SSAS services, particularly in the Full SIPP segment, which the Directors believe offers a highly attractive investment opportunity for the following reasons:

• Long term structural market growth
• Excellent underlying business fundamentals
• Near term M&A consolidation with a robust pipeline
• InvesctAcc is an attractive platform company
• Clear value creation delivery
• Strong leadership team with sector credentials and M&A track record

Summary of Market Backdrop

We believe that the current market backdrop has amongst a range of drivers, four notable interrelated themes which the Directors believe are shaping a clear customer need that remains largely unmet.

Per latest estimates, there are currently 21 million people aged 55 and over in the UK (2020). The Directors believe future financial solutions will need to reflect an increasing level of intergenerational financial and social dependencies with financial products, advice and life solutions needing to be tailored to meet a spectrum of complex multi-generational needs.

Intergenerational wealth transfer is expected to exceed US$68 trillion, with £5.5 trillion of this in the UK.

• In the UK, 46 per cent. of first-time buyer mortgages is supported by their parents; 
• 75 per cent. of parents provide financial support to children who have left home;

• In the UK, household wealth is principally concentrated in property (36 per cent.) and pension assets (42 per cent.).

Opportunities for a new approach to family-focussed financial solutions

With the combination of these social and macroeconomic conditions and trends, the Directors believe all generations are facing increasingly challenging financial situations which are creating several problems to be solved. 

The Directors believe there is a well-defined need and opportunity, now more than ever, for clear and impartial support and solutions to be provided to, and shared amongst, friends, family and peers. 

Strategy Execution

The Company is going to use a unique platform to deliver its strategic vision executed through a focused M&A strategy of buy-and-build and strategic partnerships.

The Company is led by a highly experienced and credible leadership team with a strong record of delivering value in financial services and executing multiple successful transactions in a variety of regulatory environments.

The Company is backed by Marwyn, who have a long track record of investing in businesses across UK, Europe and North America, partnering with exceptional, industry-leading management teams to develop industry leaders. Marwyn uses publicly-listed acquisition vehicles to identify and acquire platform businesses before pursuing buy-and-build strategies to create long-term value.