SIPP 

Curtis Banks will use £9m war chest to buy rivals

Curtis Banks will use £9m war chest to buy rivals

Self-invested personal pension provider (Sipp) Curtis Banks is eyeing further acquisitions after seeing strong growth from its latest purchase.

The provider has spare capital of £9m and is looking for opportunities in the small to mid-sized bespoke market of firms comprising about 5,000 to 6,000 Sipps.

Further capital, if needed, could be made available from creditors and the markets, the firm's chief executive officer Rupert Curtis said.

He said: "We are looking more actively now. After a year of considerable growth we have re-activated looking around and we think there will be more opportunities in the future."

Although the firm said it was "not interested in poor quality books" it is not alone in its quest for further bolt-ons. 

In February, Sipp provider Talbot & Muir said it was looking to fill the "vacuum left behind" by its rivals as they start to bear the brunt of allowing bad investments into their books.

The firm's founder and director, Brian Talbot, said he expected more consolidation and failures in the marketplace as investments in toxic assets came back to haunt some of its rivals.

There has been much talk about Sipp consolidation in recent years but while there has been some movement - Dentons acquired Sippchoice, Embark bought Rowanmoor - Defaqto insight analyst Andrew Duthie said last year Sipp consolidation has not yet properly happened.

He said Defaqto Engage data showed as at 1 September 2017 the number of providers in the market was 85 while on the same date in 2015 and 2016 it was 82, suggesting that actually the market had grown not contracted. 

In a blog post for FTAdviser he wrote: "There has been some consolidation in the market and though individual brands remain, there may be one larger parent that owns multiple brands."

For example, in 2015 Cofunds and Suffolk Life were both owned by Legal & General but by 2017 Legal & General still had a Sipp while the Cofunds platform was owned by Aegon and Suffolk Life was owned by Curtis Banks - both of which were already in the market in 2015 with their own Sipp products.

"So despite the fact there are now three Sipps with three different owners, these changes have no net effect on the number of brands in the market," Mr Duthie wrote.

At the same time, Defaqto's data showed assets under administration within Sipps had grown by a third from 1 September 2016 to 1 September 2017 spread across all the Sipp products on which the firm collects data.

Curtis Banks itself houses various brands of Sipps but the firm is in the process of developing a proposition to streamline the terms and prices offered across its different products.

The Sipp is due to launch in the second half of this year.

In its annual results out today (15 March) Curtis Banks posted profit hikes of 51 per cent (£10.7m) while operating revenue increased 47 per cent to £43.6m.