Win-win situation

Absorbing Higham Dunnett Shaw into Capita Hartshead at a time when pensions administration business is growing is a win-win situation, the firms’ leaders claim.

They say close focus on administration issues by schemes and trustees means there will be significant opportunities for growth by unifying the companies and playing to their existing strengths.

Capita Hartshead managing director Mike Addenbrooke says the firm now holds a 30pc market share in pensions administration – a share which, he says, puts the firm in a position to grow its offering to the point where it can offer a complete service to its pension scheme clients.

He explains: “From the pensions administration point of view we are in a very strong position certainly. The two businesses provide services for clients in a similar manner and the methods are synergistic. We have got PPF wind-ups, we have got life and pensions customer retention. There are bulk annuities and bulk policies.”

Specialisms cited for making HDS an attractive acquisition target included scheme wind-up expertise, a Pension Protection Fund assessment service and a liability management offering.

HDS chief executive Jocelyn Blackwell says HDS needed to be part of a bigger organisation to provide support for its key operations.

Being part of a larger operation also allows it to concentrate on specialisms – such as carrying out PPF assessments – while the existing Capita Hartshead team provided back office support, she notes.

Blackwell cites HDS’s governance business as one example of this.

She says: “Governance is something we have seen a lot of interest in at the moment and that is why we started a governance business a little while ago.

“The pool of 500 or so clients between us means we can sell better to these people. It is certainly one of the hot areas.”
Addenbrooke believes the merger will also produce other benefits to the combined firm including the ability to further improve administration standards across the industry – something both firms have championed.

He says: “We are concentrating on raising standards. It has been a continuous process and certainly I believe that it has been recognised that administration of schemes is improving all the time.”

Blackwell – who is on the steering committee of the Raising Standards of Pensions Administration initiative, a body set up in a bid to improve the administration standards across the industry – also believes administration standards were improving.
“The industry seems to be gradually moving in the right direction. We certainly seem to be getting that feedback that things are getting better.”

Capita Hartshead announced its £15m acquisition of HDS last week – explaining that the full integration of the two businesses would take three to six months.

HDS employs 260 staff located in four cities – London, Edinburgh, Telford and Leeds – all of which are expected to remain. With the acquisition of HDS, Capita Hartshead will employ more than 1300 staff across 13 locations in the UK and Ireland.