Cushon is buying Northern Ireland-based master trust Workers Pension Trust following a £26m funding round.
A £6m equity raise has involved fintech venture capitalist firm Augmentum Fintech, which also includes Tide, interactive investor and Habito in its portfolio.
A further £20m in credit facility has been committed from specialty lending firm AshGrove Capital. Cushon says the funding round leaves it well positioned for further acquisition and consolidation of other master trust schemes.
Cushon is buying Construction First Limited, which is the scheme funder of the Workers Pension Trust scheme. WPT is a major auto-enrolment master trust in Northern Ireland where it supports over 5,000 employers and more than 110,000 employees with pension investments of more than £330m.
Cushon acquired the Salvus Master Trust, now Cushon Master Trust, last year and this latest deal brings Cushon’s overall assets under management to £740m and total number of members to over 200,000. The deal makes Cushon the 6th largest master trust by number of employers managed.
Cushon says the funding will also be used to support further acquisitions, scaling capability and product innovation with accelerated delivery of enhancements to support employers and engage employees.
Cushon CEO Ben Pollard says: “Following our entry into the pensions market last year, and launch of the world’s first net zero pension, we’ve been keen to bring our unique technology-led proposition to as many employees as we can, as quickly as we can. This raise has the right balance of lending and equity to enable us to do just that. We are delighted to welcome the team at WPT to our expanding family and to have the support of such experienced investors to help us continue on our journey.”
Augmentum Fintech CEO Tim Levene says: “We believe that workplace savings and investments are ripe for disruption and with public policy across Europe increasingly seeking to encourage people to save more, both for their retirement and in general, we believe there is significant opportunity to successfully challenge incumbents. We were impressed by Cushon’s blue-chip client list, world leading stance on climate change and its emphasis on getting people to understand the value of saving through the workplace. It is well placed to win significant market share.”
AshGrove Capital co-founder and partner Phil Fretwell says: “Cushon has developed disruptive technology enabling it to provide better outcomes for workplace savers, a market that is evolving rapidly and demonstrates clear organic and inorganic growth opportunities. The business model also exhibits strong credit characteristics due to its highly predictable revenue profile and compelling unit economics. Tech-enabled services is a key focus area for AshGrove Capital and in Cushon we have found an opportunity to support a superb management team with a positive sustainability agenda that has built a business which, in our view, is at an inflection point of growth.”
Construction First managing director Declan McErlean says: “We are delighted to be joining the Cushon Group. Workers Pension Trust employers and members alike will benefit from the investment, technology, and innovation that Cushon brings to workplace savings. Cushon is a natural fit for our members and employers. We believe this acquisition will allow us to enhance the employer experience and improve member outcomes.”
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