Mobius Life has been chosen as fund administrator for AB's target-date funds (TDFs) as the fund manager looks to expand opportunities for its clients.
Having launched its UK flexible TDF range in 2009, AB now manages over £1.5bn for around 2700 employers across the country.
While AB already uses a number of platform providers, it wanted to gain access to another to give different opportunities for different clients.
It comes as the fund administration industry has been going through a lot of change, with some asset managers and insurers exiting the business in recent years.
AB's head of investment delivery David Porter told PP: "We were looking for a firm that could provide these solutions not just in a fund wrapper, like an insurance wrapper, but also in a segregated mandate where you can have direct ownership of assets. That's the direction of travel that existing partners didn't want to go down, and was quite difficult to find in the open market.
"Some larger defined benefit (DB) legacy schemes prefer the idea of directly owning the assets the trustees are investing in, which you don't get through an insurance policy.
"While insurance policy is normal market convention, and perfectly safe, there's a bit of ownership that larger trusts prefer. Selecting a provider that can do that gives us a huge edge in understanding how that works for the future - and that applies not just to decumulation but at-retirement products too."
In addition to Mobius, AB will continue its current relationships with platform providers such as Phoenix Group and Friends Life, although it all depends on client preference.
The firm was also attracted to the independent structure of Mobius given its specific focus on providing investment administration for institutional UK pensions.
Where other firms have pulled out of fund administration, a lot of the time this was just a small business in larger conglomerates such as banks or insurers.
"When this non-core business gets in the way, it gets cut," said Porter. "I've seen it time and time again. I don't want to have to move my clients in a few years' time."
AB was also keen to find a platform that could help it bring opportunities in DB schemes to defined contribution, such as illiquid exposure.
"Illiquidity can be brought into a life insurance world today. For us, it's about how we manage the illiquid exposure - something we would want to bring our investment management skills to bear.
Mobius Life chief executive officer Adrian Swales added he was pleased to work with AB to provide a "first-class service" to DC pension clients.
"AB has a global reputation for their investment management and this agreement supports our long-term strategy to further grow our services in the UK DC market."
AB is seeing more interest from asset managers in how they can efficiently use the life company wrapper, Swales added.
