Curtis Banks has acquired Suffolk Life from Legal & General in a deal worth £45m. The stock market announcement, made this morning, shows Curtis Banks is raising £27m through a placing of 8,437,500 new ordinary shares. Suffolk Life first came under the ownership of Legal & General in 2008, when it was bought for roughly £52m.
Curtis Banks floated on the Alternative Investment Market (Aim) last year, after being valued at approximately £85m. The acquisition follows Curtis Banks’ deal in October 2015 to administer Zurich’s Sipp business for a minimum 10 year period.
According to Money Management’s latest Sipp survey, published in October 2015, Curtis Banks has a total value of in-force Sipp business of £8bn, and the combination of Suffolk Life’s Master, Sim, Smart and deed-poll scheme Sipps amount to £4.5bn. Suffolk Life has 25,770 fully self-invested plans, and Curtis Banks 27,000, Money Management data shows. The combined figure of 52,770 will make it the second-largest open-architecture Sipp provider in the UK, behind AJ Bell which has 85,607 Sipps. Hargreaves Lansdown is the largest provider with just shy of 224,000 Sipps, but is platform-only.
The deal, subject to an underwritten placing by Curtis Banks and regulatory approval, is expected to be completed in the first half of 2016. Curtis Banks has said the acquisition will have no impact on the existing offices of either firm and Suffolk Life will continue to run as a separate self-contained operation in Ipswich with its own staff and systems. Greg Kingston, head of marketing and insight at Suffolk Life, confirmed the firm will also continue to administer the Cofunds Pension Account (Sipp), in which it has a long-term contract in place.
Mr Kingston said, “There are no changes as of today. The Suffolk Life Sipps and schemes will continue to operate as before. Continuity is important.”
There has been plenty of speculation over the past few years that 2016 would see a lot of consolidation in the Sipp market, particularly in the run up to September when the FCA’s capital adequacy requirements will come into action. The regulatory requirements and slowing growth have been reasons cited for many smaller Sipp operators to be forced out of the market.
When it comes to capital adequacy requirements, Mr Kingston added, “We will continue to reserve our own capital. When the ownership changes, we will still continue to reserve our capital in our own right as we will still be a separate legal entity.”
