The Link (ASX: LNK) share price will be under scrutiny this morning after the $3 billion company announced its entry into the UK pension market.
Link Group is a technology-enabled provider of outsourced administration services for superannuation fund administration, corporate markets and related value added services including data management analytics, digital communication, and stakeholder education and advice. The business has three key divisions: Fund Administration, Corporate Markets and Information, Digital & Data Services (IDDS). Link is the largest provider of services in Australia’s superannuation fund administration industry, which services the fourth largest pension pool in the world based on funds under management. Originally a share registry business within an accounting firm, Link Group listed on the ASX in October 2015 and over the past 10 years has grown its domestic and global operations.
Link’s Entry Into The UK Pension Market
Link announced a strategic global partnership and minority investment in Smart Pension, which is a leading UK workplace pension provider. Two of the other investors in Smart Pension are Legal & General and JP Morgan.
The UK retirement is estimated at US$2.9 trillion, so this partnership provides Link with a large and quick entry into this market and adds to Link’s existing presence in the UK.
Link’s investment in Smart Pension will provide exclusive access in certain areas in Europe and Asia.
Part of the agreement will mean Link takes on the administration of Smart’s UK workplace pension operation including the administration of the Smart Pension Master Trust, which is growing quickly according to Link.
One of the main reasons why Link is attracted to this partnership is the “rapidly growing” UK auto enrolment market and corporate defined contribution market which is similar to the Australian superannuation system.
The system requires all UK employers to automatically enrol their eligible workers into a pension scheme so that it’s now an ‘opt out’ system.
Link Group Managing Director John McMurtrie said: “This partnership with leverage Link Group’s core capabilities and is an example of our strategy to identify attractive adjacent market opportunities aligned with our service strengths with a pathway to future growth.”
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At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.