Schroders is to buy Liberty International Pensions for £60m in a move to increase its presence in th...
Schroders is to buy Liberty International Pensions for £60m in a move to increase its presence in the defined contribution pensions market.
Schroders, which already has an active and a passive fund management capacity, said the purchase of the pensions group would give it improved member communication and administration services for DC business.
The group is buying the pensions firm, which trades as Liberty Pensions, from UK property group Liberty International, which owns 80% of the shares of Liberty Pensions. The other 20% is owned by the trustees of the BT Pension Scheme and Capital Group International. Liberty Pensions has £3.2bn in unit-linked funds under management.
Liberty Pensions has a DC team of around 50, a customer service centre and index tracking investment management arm called Hermes Investment Management. The index tracking arm will be rebranded Schroder Hermes.
Hermes is the principal fund manager to the pension schemes of BT and the Post Office and manages in excess of £49bn for the schemes.
The acquisition is subject to regulatory approval, which is expected to be obtained by the end of September.
Liberty Pensions was set up in 1996 and is focused on the corporate pensions market.
David Salisbury, chief executive of Schroders, said: "We recognise the growing trend towards DC pension provision in the UK, which will be accelerated by the introduction of stakeholder pensions in April 2001. This acquisition enables us to achieve our stated aim to be a leading DC service provider offering a range of services to the group UK DC pensions market, complementing our existing defined benefit position.
"The strategic fit of combining Schroders' asset management capabilities and Liberty Pensions' expertise allows us to significantly expand our DC services." Liberty Pensions currently specialises in third-party administration and communication services to the trustees of occupational money purchase schemes. It also deals with providers such as fund managers and life offices who wish to outsource the administration of their personal pensions, GPPs, stakeholder plans and occupational money purchase schemes.
The group does offer its own range of products including GPPs, personal pensions and occupational schemes.
David Fischel, managing director of Liberty International, said: "This transaction is very much in line with our stated strategy of focusing on our core property business."