PE Firm LMP Invests in Retirement Services Provider Definiti

LMP’s majority stake in the retirement administrator and recordkeeper will fund strategies including “aggressive” strategic acquisition.

Private equity is not done with the retirement industry in 2023.

On Thursday, private equity firm Lovell Minnick Partners LLC announced an agreement to acquire a majority stake in Definiti LLC, a 401(k) plan design administration consultancy and recordkeeper. The investment will be put toward client services and organic growth, as well as strategic acquisitions, according to Philadelphia-based LMP. The firms did not disclose the size of the investment.

The deal signals continued interest from private-equity firms in the retirement advisory and recordkeeping space, even as overall PE activity has been falling over the past two quarters, according to PwC Consulting. In October 2022, recordkeeper JULY received an investment of an undisclosed amount from PE firm Platform Partners, and in April 2022, private equity firm Stone Point Capital, along with GIC, Singapore’s private wealth fund, announced an acquisition of retirement services provider Ascensus.

Houston-based Definiti serves more than 8,000 employers and 10,000 retirement plans in the U.S. as a third-party administrator for retirement plan administration, recordkeeping and compliance services, as well as actuarial consulting and pension outsourcing.

“Our investment in Definiti is a testament to its strong reputation and ability to differentiate itself as a market leader,” Steve Pierson, managing partner at LMP, said in a release. “We look forward to partnering with Tom and the management team to extend Definiti’s reach, enhance its service capabilities, and aggressively pursue strategic acquisitions to complement its organic growth trajectory.”

The transaction is expected to close in the first quarter of 2023, subject to customary regulatory reviews and approvals, according to the firms. Waller Helms Advisors served as financial adviser to LMP, and Raymond James served as financial adviser to Definiti.

Definiti was formerly called Group RHI, which acquired firms in the workplace and billing administration spaces to bring them under the banner of Definiti, according to the company.