ECI Partners has invested in professional trustee company Independent Governance Group, alongside LDC, in another sign that private equity companies see the pensions sector as an attractive investment.

The investment represents an initial exit for LDC, which backed IGG following the merger of Ross Trustees and Independent Trustee Services in February 2023, having first invested in Ross in November 2020.   

LDC has also reinvested alongside ECI, citing revenues and headcount increasing by over 300% during its partnership with IGG through organic growth and five acquisitions, including IC Select and Like Minds. IGG employs more than 200 people, providing services to 386 pension schemes with combined assets of £324bn. 
 

 
“We were attracted by IGG’s fantastic track record of delivering award-winning pension services with excellent client retention, delivered by a highly skilled team,” said Michael Butler, a partner at ECI. “The company provides a strong organic growth opportunity due to growing demand for trustee and governance services as the pension regulatory environment continues to grow in complexity, and we also anticipate acquisitions to further boost growth.”    

Chris Handy, partner at LDC, said: “Over the last four years, Andrew and the management team at IGG have delivered transformational growth and created a market leader in the pensions industry. We’ve had the privilege of supporting their growth journey and the success they have achieved is testament to the ambition and capability of their entire team. We’re looking forward to continuing our support for the business.”  

IGG chief executive Andrew Bradshaw thanked his team and LDC and said: “With ECI on board alongside the continued support of LDC, we are well positioned to pursue our plans for growth, deliver innovative solutions to meet our clients’ evolving needs and, importantly, create new career opportunities for our talent.”  

As the pensions sector has professionalised, it has increasingly become a target for private equity firms. Private equity firm Aquiline Capital Partners in July agreed to take a majority holding in Isio Group, the pensions consultancy that spun out of KPMG UK four years ago with backing from Exponent Private Equity. Aquiline also has a stake in fintech and master trust provider Smart Pension, and in Wealth at Work, a provider of workplace financial education, guidance and advice. Elsewhere, Corsair Capital invested in trustee and financial services provider Zedra in 2019, while Conduent sold its HR and pensions consulting arm to private equity firm HIG Capital in 2018, until it was bought by brokers Arthur J. Gallagher & Co last year. 
   

     
Private equity has been in the spotlight ahead of the Budget on Wednesday, as there has been speculation chancellor Rachel Reeves could start levying income tax on carried interest – a key remuneration element for PE bosses – instead of the 28% capital gains tax it currently attracts. In 2021, Reeves had vowed to close the roughly £500m a year tax “loophole” if Labour was elected. However, a recent report in the Guardian newspaper suggests the government might have changed its mind on the issue, fearing the measure could have a net negative effect for the exchequer if private equity moves abroad in response.