DWS Group has acquired a minority stake in Smart Pension Limited, the UK-based retirement technology provider behind one of the country’s larger auto-enrolment master trusts.
Smart’s platform – “cloud-native and API-based” – allows governments and financial institutions to administer retirement savings plans and powers the £1.9bn defined contribution (DC) Smart Pension Master Trust.
DWS said the investment would form an integral part of its growth strategy in the UK, and that it and Smart had agreed the intention to form a strategic partnership with the aim of offering investment solutions for the master trust.
“Acquiring a minority stake in Smart is an exciting investment opportunity for DWS given the outlook for growth in defined contribution pension savings both in the UK and globally,” said Mark Cullen, member of the executive board of DWS Group and chief operating officer.
“We believe that the strength of Smart’s technology platform underpins their current success and that the asset management capabilities of DWS have the potential to help Smart to achieve its global ambitions.”
Smart was launched in the UK in 2014 and started the Smart Pension Master Trust a year later. It said it now also operates in Australia, the Middle East, the US, and continental Europe (last year it said it wanted to expand into the Netherlands). Assets on its technology platform grew 160% in 2020, it said, reaching more than £2bn.
DWS is investing as part of Smart’s £165m series D funding round, joining Chrysalis Investments and longer-standing investors Barclays, JP Morgan, Legal & General Investment Management, Link Group and Natixis Investment Managers.
The Smart master trust is now able to incorporate illiquids into its default strategy after working with Natixis to create a solution to that effect, the MV Dual Credit Fund.
Co-founders of Smart, Andrew Evans and Will Wynne, said they were “delighted” that DWS was “joining us as an investor and partner to help fuel our global growth as a wave of legislative change sweeps the world”.
French asset management consultancy INDEFI has projected that assets in European DC plans will surpass €10bn by 2030, with the “platform” market most attractive for fund managers in terms of accessible revenue pools.
The terms of the transaction between DWS and Smart, which has already closed, are not being disclosed.