Norwegian fund tycoons take stake in UK start-up Smart Pension
Norway's Stensrud family is buying a stake in Smart Pension that values the UK tech start-up at £65m, Sky News learns.
By Mark Kleinman, City Editor
One of Norway's wealthiest families is buying a stake in a British provider of auto-enrolment pensions, as a deadline looms for companies to assist the millions of employees without retirement plans.
Sky News has learnt that the Stensrud family, which owns the Norwegian asset manager Skagen, has agreed to invest millions of pounds in Smart Pension, which launched two years ago.
Smart Pension claims to sign up a new employer to its platform every seven minutes, targeting the hundreds of thousands of smaller UK businesses which are racing to comply with new pensions legislation.
The Government has set a final deadline of next year for all employers to have established auto-enrolment workplace pensions for their staff.
The Stensrud family's participation in Smart Pension's £15m Series B funding round is expected to be announced on Monday.
It will take the total amount of capital invested in the company since it was set up to £25m, and will value it at £65m, according to insiders.
And it will come almost a year after the FTSE-100 financial services group Legal & General (L&G) also bought into Smart Pension as a way of tapping into the explosive growth of the financial technology sector.
Co-founded in 2014 by a former head of Lloyds Banking Group's wealth unit and a technology entrepreneur, Smart Pension launched in 2015 in anticipation of huge demand from companies ahead of a final Government deadline for auto-enrolment in 2018.
Thousands of warning letters have already been issued by the Pensions Regulator to small businesses which have failed to establish the new arrangements on time.
The new measures have sparked huge concerns among groups representing SMEs because of the bureaucracy it entails.
Under the new rules, every employer must automatically enrol workers into a workplace pension scheme if they are aged a least 22, earn more than £10,000 and work in the UK.
Smart Pension's service is free to employers, while it charges individual employees a fee worth 0.75% of their pension contributions, compared to the 3.9% charged by the Government-backed pensions service Nest.
Andrew Evans, Smart Pension's co-founder and chief executive, said this weekend: "Like the government provider, Nest, we 100% guarantee to accept all employers and employees.
"We, however, differ hugely on funding.
"Nest recently reported it has spent nearly £600m to date and that it is currently forecast to cost the taxpayer over £1.2bn."
The latest round of funding will enable Smart Pension to accelerate the introduction of faster technology, which it believes will drive demand from larger employees dissatisfied with their existing pension scheme administrators.
It will also allow the company to expand internationally to other countries examining auto-enrolment as an option to tackle their own pension crises.
L&G and Smart Pension's other existing investors, who include several prominent technology entrepreneurs, are also backing the latest round.
The fundraising was arranged by Ashcombe Advisers, a London-based corporate finance firm.