Cardano Group has acquired covenant specialist Lincoln Pensions in a deal that will enable the firms to provide integrated risk services to pension schemes and sponsors.
It will see Lincoln become part of Cardano Group, but continuing to operate independently with the same team and management. The combined business will employ more than 200 people across risk management, investment advisory, fiduciary management and covenant advice.
The move is partly in response to The Pensions Regulator's (TPR) increased focus on integrated risk management (IRM), where investment risk is related to the strength of the covenant and employer contributions.
Cardano will be better able to embed covenant risk within its strategies while Lincoln will more fully incorporate investment risk and economic scenario testing within its covenant advice.
Cardano's co-chief executive officer (CEO) Michaël De Lathauwer said it is important to think about the interrelation between these risks.
The combined firm will be in a good position to develop tailored solutions to help clients in balancing these risks, he added.
"We thought if we were to work closer together, we could change the pensions industry for the better in the way the regulator's asking for," he added.
Lincoln Pensions CEO Darren Redmayne called it a "natural evolution" and that the firms "speak the same language around stress testing and dealing with risk".
"It will work very well having our covenant business sit within a group completely focused on optimal management of investment risk, and we will be able to deliver to our clients ultimately a better service," he said.
The firms will also work with Lincoln International, the former majority owner of Lincoln Pensions, under a new strategic partnership, to provide integrated risk advice in merger and acquisitions and related corporate situations involving pension funds.
Cardano was first established in Holland in 2000 before launching in the UK market in 2007.
De Lathauwer said Cardano never intended to be an acquisitive company, and that taking on Lincoln is about enhancing quality rather than wanting to become a large firm.
"It's about adding an interesting skillset but in a way that won't overwhelm Cardano; it feels like the right size to add to the company. We have no intention to become a very large company; we want to stay very focused on the clients we serve and quality of the offering."
Dominic Grimley of Aon looks ahead to a return to pre-COVID-19 levels of bulk annuity transactions as the world begins to return to normality
Olly Walker of Aon explains how companies can help staff with financial wellbeing
Up to £350bn of investible assets could be found within the energy sector over the next 30 years as investment in opportunities to decarbonise the economy by 2050 increases, Lane Clark & Peacock (LCP) finds.
As demand for investments in the private market continues to grow, there is ever-increasing interest in considering ESG factors to promote greater transparency, for better risk management, and to aim to deliver long-term value
Demands on asset managers to consider ESG issues and adopt greater transparency has prompted ShareAction to publish a leading practices report, so that investors can compare the practices of their chosen firms with leaders in the industry.