On the go: Wealth management company SEI has announced the acquisition of Capita’s defined contribution master trust Atlas, subject to regulatory approval.
The financial details of the deal have not been disclosed, but industry experts suggest that further consolidation arrangements are likely in the coming months.
Founded by Capita in 2015, the Atlas Master Trust provides services to more than 110,000 members, with assets under management valued at £1.5bn.
As part of the deal, SEI will welcome three employees to its institutional group and one of the Atlas trustees to the SEI Trustee group.
The combined assets under management of the SEI and Atlas master trusts totalled approximately £2bn as of September 30.
Capita Pension Solutions will continue to provide pension administration services to the expanded SEI Master Trust.
Paul Klauder, head of SEI’s Institutional Group, said: “As we continue to identify strategic opportunities to expand our global footprint and boost our offerings, we believe this acquisition supports SEI’s growth.”
In a statement published on Atlas’s website, Alan Whalley, chair of Atlas Trustees, said that members do not need to take any action, and there will be “no immediate changes to members’ Atlas retirement savings, which remain safe and governed by an independent board of trustees”.
He added that the master trust expects to obtain regulatory approval and “effect the change later this year”.
Stuart Heatley, managing director of Capita Pensions Solutions, said: “Over the past year, we have been carrying out a strategic review of our pensions business to ensure we are delivering best-in-class products and services to our clients.”
He noted that the decision to simplify Capita Pensions Solutions and sell the master trust enables the company to focus on its pensions administration and consulting offering, “and it positions us for further growth as the market continues to expand”.
“We feel this is the right strategic decision for our business, as well as the best outcome for our members and clients,” he added.
Michael Ambery, partner at Hymans Robertson, said that the deal is the culmination of a lot of industry anticipation surrounding master trust consolidation.
“This is the second headline consolidation of master trust providers this year and a movement of well over £1bn to SEI in the purchase of Atlas. It will give SEI considerably more scale and the ability to refocus proposition and direction to continue to grow both assets under management and employers,” he said.
“The purchase was natural in the fact that Capita is the underlying administrator for both SEI and Atlas Master Trust. What is less natural is the movement of investments for members and the combination of two master trust boards and operating models into one.
“However, we understand that this will be at no detriment to members as the transition of member investments and cost will be borne by SEI as part of the purchase.”
Ambery added that further consolidation deals are “likely” over the coming months due to “current market activity, combined with the fact that providers are searching for these economies of scale”.
