STM eyes UK auto-enrolment market with Carey purchase

STM Group Plc has announced that it has entered into an agreement to acquire Carey Administration Holdings Limited (Carey), a UK-based SIPP and auto-enrolment pensions specialist, for £400,000.

The UK-listed cross border financial services provider said that it is buying the company despite Carey being embroiled in a high profile Court case, known as the ‘Adams’ case.

STM, which, as reported, has had its own share of difficulties in recent times, said that it is going ahead with the sale regardless of the case and said that it has “secured indemnities and the benefit of significant existing PI cover from the sellers” considering any residual exposure to this and any other historic industry issues, to be “minimal”.

STM said in a statement that the deal will be funded from existing financial resources and is subject to regulatory approval by the UK’s Financial Conduct Authority and The Pensions Regulator in the UK.

Carey’s auto-enrolment (AE) business is one of the top 20 AE providers in UK by size and currently has over 65,000 members. STM said that it will now be able to enter the UK AE market via Carey’s AE business, offering “quality service levels to intermediaries and advisers that wish to offer a more personalised service to their client companies”.

The Adams legal case which was being heard at the High Court in London earlier this year – and has yet t0 be settled – involved claims via lorry driver Russell Adams, a Carey client, relating as to whether he had full knowledge of risks when in investing his £50,000 pension into storage pods from Store First, which later lost the majority of their value.

Consolidation 
STM said that the UK AE market is “undergoing considerable consolidation” as part of the upcoming TPR authorisation process – and, as such presents “an opportunity for STM to accelerate its growth strategy by acquisition”.

Once complete, the Carey businesses will be rebranded within six months and the enlarged UK business will employ in excess of 100 people part of  STM’s stated intention of being seen as “an increasingly UK centric business”.

Alan Kentish, chief executive of STM, said: “We are delighted to announce the acquisition of Carey Administration Holdings Limited, and its subsidiaries. Carey pensions has been a self-starter in the UK pensions market and has achieved a lot under Christine Hallett’s leadership during a relatively short time frame.

“The management team has ideas and opportunities in abundance and I believe STM’s resources, financially and otherwise, will allow many of these to come to fruition.”

Integration
Kentish pointed that the integration of the two similarly sized SIPP businesses will give the deal some “straight-forward integration savings” and make the enlarged SIPP group “much more efficient”.

“We have seen this previously in both our London & Colonial and Harbour acquisitions. In addition, it helps us to offer niche SIPP products to the UK market with minimal financial outlay.”

Christine Hallett, will remain as CEO of Carey Pensions as part of the deal.

“Given STM’s focus on gaining further traction in the UK market, Carey Pensions is ideally placed to help achieve that aim,” she added.

“We are well known in the industry and we have a unique proposition covering both personal and workplace pension solutions, which is an important differentiator compared to many of our competitors.”

Simon Cole, chief operating officer of Carey Group, said eh was delighted that the company’s UK pension investments are “going to a good home”.

“I have watched the impressive progress made by STM in the international pensions market, and it seems that we can now help them with their UK plans,” he said. “This is a tremendous opportunity for Carey Pensions and on behalf of Carey Group, I wish STM and Christine Hallett and her team every success for the future.”

ABOUT THE AUTHOR
Gary Robinson
Head of Video and Ezines at Open Door Media Publishing. Deputy Editor, International Investment. An experienced journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as a fully qualified IFA, Gary works across both International Investment and InvestmentEurope titles. Previous video production credits include projects on BBC, C4 and SKY.

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