Embark raises £39m after investment trio take 40% stake in group

Hannah Godfrey reports...

Investment giants BlackRock, Legg Mason and Merian Chrysalis Investment Company have taken a combined stake of nearly 40% in platform and pension provider Embark Group.

The investments have raised some £39.4m for the firm, which will be used to help to grow the business and provide resources if Embark decides to make an acquisition.

Blackrock and Legg Mason each took a 9.9% stake in the group, while Merian Chrysalis took 19.99%.

Embark group chief executive Phil Smith (pictured) told RP’s sister publication Professional Adviser the capital raised from the investors will be used for predominantly organic growth.

“We will deploy [funds] into accelerating attachment to distribution partners, and that takes time and money and people to complete. So we’ll do more than we have been doing.

“We will [also] invest into our workplace offering, which is a fabulous area for us where we are small and want to be large and will see quite a lot of activity over the next couple of years.”

No M&A in the SIPP market

Smith did not rule out further acquisitions, should Embark feel they would benefit the group, adding: “Having that degree of funding behind us – when inevitably inorganic opportunities pop up, we want to be able to move as fast as we normally do without having to go back to shareholders to fund them.”

Last year, it took Embark just 12 days to acquire the trading assets of Liberty SIPP through its subsidiary EBS Pensions.

Smith was adamant, however, the firm was not actively looking for potential acquisitions, and had “nothing immediate” in the pipeline.

“We are only interested in mergers and acquisitions when it involves one of two things,” he explained. “It either brings a new proposition or component that we didn’t have that we think is strategically critical, or it just brings out-and-out scale.

“We have always said we wouldn’t really want to buy anything that had a scale of less than £2bn in assets under management, which we’ve held to. The realistic thing now is there isn’t anything out there which is greater than £2bn that is viable, so we’re not going to be doing any M&A in the SIPP market.”