Smart Raises $95M in PE Funding, Eyes Further Acquisitions

Aquiline Capital leads a funding round for the U.K.-based retirement technology firm with operations in the U.S., Europe, Middle East and Asia.

Retirement financial technology firm Smart Pension Ltd. has snagged another $95 million in private equity funding to expand its global operations and fuel more acquisitions, the London-based firm announced on Monday.

Aquiline Capital Partners LLC, Chrysalis Investments and Fidelity International Strategic Ventures contributed to the Series E fundraising round for Smart, which partners with advisers, asset managers, plan sponsors, recordkeepers and third-party administrators on retirement plan solutions, including managed accounts and retirement income. The funding will go to global growth across Smart’s operations in the U.S., Europe, Asia and the Middle East, along with funding acquisition plans, according to the announcement.

Smart, whose U.S. operations are based in Nashville, Tennessee, launched in the U.S. in 2020 with investment from JP Morgan Chase & Co., Legal & General Group plc and Barclays. The firm has been targeting growth in the U.S. retirement plan market since the original Setting Every Community up for Retirement Enhancement Act of 2019, most recently starting a pooled employer plan with Transamerica Corp. in March 2023. Its strategy of offering solutions after retirement-related legislation is similar to its founding in 2014, when the firm started up after the U.K. rollout of mandatory workplace retirement plan enrollment, according to the announcement.

Smart’s growth has been driven in part by “global demand for modern, digital retirement savings technology” and strategic mergers and acquisitions, including the 2022 acquisition of Stadion Money Management, a managed account provider to savers, according to the announcement. Private equity firms have been pouring funding into the retirement and wealth management space in recent years, often driving M&A activity, according to tracking by M&A consultancy firms such as Echelon Partners.

The funding will go toward retirement coverage solutions that differ by the market, says Jodan Ledford, CEO of Smart in the U.S. Within his focus area, Ledford says one push for growth will be bringing more PEPs to market to serve an increase in small and midsize employer retirement plans. The CEO says that, between state mandates and incentives from the SECURE 2.0 Act of 2022, he anticipates in the range of 1 million new retirement plans coming online in the next 10 years, with many being served by PEPs.

“We’re in the position of being able to provide the technology that works to capture this flow of plans in the current market with providers, as well as to provide tools that help make them go faster and work with these plans,” Ledford says. “It’s an area that is poised for growth.”

Another area expected to benefit from the funding is Smart’s work as a facilitator for retirement income solutions, ranging from managed accounts to custom target-date funds that provide fixed-income annuity options, according to Ledford.

“There is a large population bubble, in respect to the Baby Boomers, who are in retirement or approaching retirement,” Leford says. “They used to have DB plans, and historically there have been a lot of rollovers to IRAs facilitated by plan sponsors. … In the U.S., we believe that there will be more of a need for a mass market solution.”

Ledford says Smart will have some announcements this year concerning both new PEPs and retirement income options the firm is supporting. He noted that, through the acquisition of Stadion, the firm has a robust platform for managed account offerings.

In the announcement, Smart forecasted that the funding round would help it boost its assets under management to $12.5 billion by the end of the second quarter, up from $7 billion.

“Smart’s retirement technology leadership, coupled with Aquiline’s deep experience in the retirement technology industry across the U.S. and Europe, makes this a compelling investment, as does the growing global need for better retirement savings technology,” Jeff Greenberg, chairman and CEO of Aquiline, said in a statement.

Prior to this funding round, Smart raised $165 million in Series D funding in 2021, was led by Chrysalis Investments.