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Troubled Sipp provider finds buyer despite court case

Sipp provider Carey Pensions has finally found a buyer in the form of AIM-listed financial services company STM Group.

Troubled Sipp provider finds buyer despite court case

AIM-listed financial services company STM Group has bought Carey Pensions in a deal worth up to £400,000, despite an ongoing court case against the UK Sipp provider. 

Announcing the deal this morning STM said it had secured indemnities over the 'Adams' case against Carey Pensions over its decision to accept investments on an 'execution only' basis from clients of an unregulated introducer business. STM said it 'considers any residual exposure to this and any other historic industry issues to be minimal'.

The deal will see STM buy Carey Administration Holdings Limited, which owns a 70% stake in Sipp business Carey Pensions UK LLP and 80% of Carey Corporate Pensions UK. The remaining shareholdings in the two businesses are owned by Carey chief executive Christine Hallett. STM has reached an agreement to buy these holdings in three years time. 

Once the acquisition is completed STM plans to expand into the auto-enrolment market for the first time through the corporate division. It will rebrand Carey within six months of completing the acquisition. 

Carey will also add just under £900 million of assets and £1.8 million revenue to STM's Sipp business. In 2016 STM moved into the UK Sipp market with the £5.4 million acquisition of London & Colonial. 

Following the deal STM will employ 100 people in the UK, a major change for a company that only recently moved its headquarters from Gibraltar. This followed an investigation by the Gibraltar regulator which ultimately ended in a skilled person review.

Hallett said the deal represented good growth prospects for STM.  

'I am really excited that we are going to be part of the STM proposition given STM's focus on gaining further traction in the UK market,' she said. 'Carey Pensions is ideally placed to help achieve that aim. We are well known in the industry and we have a unique proposition covering both personal and workplace pension solutions, which is an important differentiator compared to many of our competitors.'

The acquisition will finally end speculation about the future of Carey Pensions. New Model Adviser® first revealed that providers were considering a bid for the business in June 2016. Financial statements covering 2017 revealed the company was up for sale after a troubling period that saw it post a loss for the second consecutive year in a row. 

High court ruling could have huge regulatory impact for Sipps.

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