On the go: Master trust Smart Pension has attracted investment from asset manager Natixis, in a strategic partnership that the companies hope will see members gain access to the fund house's suite of alternative strategies.
The French asset management giant’s equity stake in Smart, part of an ongoing preferred investment round, sees it join Legal & General, JPMorgan and administrator Link as one of the fintech’s capital backers.
The two companies are also entering a strategic partnership.
Smart, which prides itself on its technology prowess and has been accelerating its UK growth by taking on schemes exiting the master trust market, said it hopes the deal will help it break into the US and Australia, while allowing it to explore bespoke solutions for increasing members’ exposure to illiquid alternative assets – a key diversification goal for many defined contribution trustee boards.
DC-dedicated alternatives products are still in their infancy in the UK, with many traditional funds charging fees well in excess of the charge cap levied on the default funds in which most members sit. The market is developing, however, with Nest, Smart's competitor for auto-enrolment business, announcing three private credit mandates in 2019.
Andrew Evans, Smart’s chief executive, said: “Natixis IM shares our vision of utilising digital technologies to help improve outcomes for all savers, and we look forward to working with Natixis IM as we build our platform to power the pensions of the future.
“Having access to their broad suite of affiliate investment capabilities will help us develop ever more innovative investment solutions for our members, including the use of illiquid alternative solutions.”
Any new fund offerings resulting from the collaboration will have to persuade Smart's independent trustees that they offer better value for money than existing offerings. But Jean Raby, chief executive at Natixis Investment Managers, saw the deal as an opportunity to grow the company's assets under management: “Natixis IM’s equity investment will help accelerate our growth in DC pension markets in the UK and globally, while also helping to support the global growth of Smart through the wide range of investment capabilities of our affiliated managers, particularly in alternative strategies.
“This investment is part of the ongoing commitment by Natixis IM to focus on the types of innovative platforms and business models that are leading change across our industry.”
