Institutional investors that have worked in partnership with Embark Group have now invested in the UK retirement business, with Blackrock and Legg Mason both participating in £39.4m ($49.6m, €43.9m) worth of growth funding, alongside Merian Chrysalis.
Merian Chrysalis’s £14.9m “material investment” is subject to regulatory approval.
The funding will be used for organic growth and acquisitions.
Merian fund manager Richard Watts said: “The retirement and savings market is going through a period of unprecedented change, with tech-enabled providers leading the charge. Many traditional players have failed to respond to the transition and are now falling behind.”
Embark’s website states that “self-invested personal pensions (Sipps) are at the heart of our business”.
It’s distribution spans financial advisers, robo-advice, retail banking, wealth management and workplace savings.
Personal responsibility shapes UK distribution
Blackrock’s investment cements the asset manager’s existing partnership with Embark Group, which it has built up over the last four to five years.
For example, in September 2017, Embark announced it would collaborate with Blackrock to create low-cost model portfolios.
Blackrock head of UK Sarah Melvin said: “The UK retail distribution landscape is evolving rapidly, with more individuals taking greater responsibility for their financial future and retirement needs. This trend requires our clients to have access to high quality, technology-enabled investment solutions.”
Global partnerships appeal to UK firm
The press release said Embark now has a portfolio of cornerstone long-term investors. Each investor holds a material minority position and will not hold seats on the board.
Embark Group chief executive Phil Smith said: “Capital is central for continued steady growth but partnering with major global players who have a fully aligned vision of the future requirements across the financial advisory, direct and workplace channels, is of huge benefit.”
Legg Mason head of global distribution Terence Johnson said the group’s strategic investment would help it to better serve UK advisers and “pursue new channels for growth in this important market”.
“With demand for digital access and interactive tools growing, Legg Mason is investing in financial technologies and platforms that meet the evolving expectations of advisers and their clients in markets around the world,” Johnson said.
Legg Mason has similarly partnered with Embark Group in the past. The business has no pre-existing ties with Merian Global Investors.
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