The Cardano Group (“Cardano”), the purpose-built investment and risk specialist, has acquired Lincoln Pensions (“Lincoln Pensions”), the UK’s largest independent covenant advisory firm.
The deal brings together two leading innovators in risk management for defined-benefit pensions schemes. The two firms will provide market-leading integrated risk services to their existing clients and to the wider pensions marketplace. This comes at a time when The Pensions Regulator (“TPR”) is advocating Integrated Risk Management (“IRM”), where the level of investment risk is directly related to the strength of the sponsor’s covenant and employer contributions.
Through this transaction:
- Cardano UK will be better able to deliver tailored investment advice and management by embedding covenant risk within its strategies to achieve even more robust and stable results;
- Lincoln Pensions will more fully incorporate investment risk and economic scenario testing within its covenant advice, enabling its clients to better understand the level of risk they can tolerate and any correlation between their scheme assets and the operations of their sponsor.
Theo Kocken and Michaël De Lathauwer, Co-CEOs of Cardano, commented: “Bringing Cardano and Lincoln Pensions together represents a very important step for our Group. Both businesses were founded on the same principles of better understanding and managing different types of pensions risk to deliver safer and better outcomes for their clients. Going forward, the combined firm will be well placed to develop tailored services that assist clients and the wider marketplace in appropriately balancing these risks.”
Darren Redmayne, CEO of Lincoln Pensions, commented: “UK defined-benefit pension schemes are facing severe challenges. Further quantitative easing and the reduction in gilt yields have made a bad problem even worse. The only way forward is for schemes and sponsors to work together on risk-based solutions that deliver safer financial futures. By joining the Cardano Group, Lincoln Pensions will be better able to assist its clients in managing these challenges. We will continue to deliver best-in-class specialist covenant advisory services that reflect an integrated risk management approach, as advocated by the UK Pensions Regulator.”
The combined business will employ more than 200 professionals across three offices (London, Leeds and Rotterdam) with expertise in risk management, investment advisory, fiduciary management and covenant advice.
Kerrin Rosenberg, CEO of Cardano UK, added: “The expertise and services offered by Cardano and Lincoln Pensions are highly complementary. Working in the same group will allow us to more effectively draw upon our combined knowledge on the investment and covenant sides of the IRM equation, allowing us to develop services for our clients and offer a comprehensive approach to risk.”
Lincoln Pensions will continue to operate independently, but as part of the Cardano Group, with the same management and team. Senior management will continue to retain direct minority ownership in Lincoln Pensions and the firm’s advisory board will be independently chaired by Tony Hobman, formerly the first Chief Executive of the Pensions Regulator.
Cardano and Lincoln Pensions will also work with Lincoln International (“Lincoln International”, the former majority owner of Lincoln Pensions) under a new strategic partnership, also announced today, to provide integrated risk advice in M&A and related corporate situations involving pensions schemes.
Jim Lawson, Chairman of Lincoln International, said: “Lincoln International is delighted that Lincoln Pensions has become part of a firm that is completely focused on advising on pensions risk. We look forward to working with Cardano and Lincoln Pensions as part of our new strategic partnership for M&A and broader corporate transactions involving pension schemes.”
About The Cardano Group:
The Cardano Group (“Cardano Group”) is a purpose-built investment and risk specialist, operating in the UK and the Netherlands. Founded in Rotterdam in 2000 under the motto “rethinking risk, for a better outcome”, it established its operations in the UK, Cardano Risk Management Ltd (“Cardano UK”) in 2007. Cardano offers clients specialised advisory and fiduciary management services helping pension funds achieve a steady stable growth in funding ratios with fewer shocks. Across Europe, they work with a number of major European pension funds and insurance companies.
About Lincoln Pensions:
Lincoln Pensions Limited (“Lincoln Pensions”) is the leading independent provider of employer covenant analysis to schemes and sponsoring employers. Its senior team possesses a breadth of experience unrivalled by any of its competitors including credit analysis, corporate finance, regulatory, legal and actuarial expertise. Lincoln Pensions provides independent, solutions-focused, covenant advice which can be used to support negotiations relating to scheme funding, M&A, or other corporate events. More information about Lincoln Pensions can be obtained at www.lincolnpensions.com.
About Lincoln International:
Lincoln International, LP (“Lincoln International”) is a global investment banking firm that specialises in merger and acquisition advisory services, debt advisory services, private capital raising, joint-ventures and restructuring advice on mid-market transactions. Lincoln International also provides fairness opinions and valuations on a wide range of transaction sizes. With 17 offices in 14 countries spread across the Americas, Asia and Europe, Lincoln International has strong local knowledge and contacts in key global economies. More information about Lincoln International can be obtained at www.lincolninternational.com.
About Integrated Risk Management
Together, Cardano and Lincoln Pensions will be best-placed to provide Integrated Risk Management (“IRM”), as advocated by the UK Pensions Regulator. Under IRM, the level of investment risk is directly related to the strength of the sponsor’s covenant and employer contributions as illustrated below: