Ascensus sells 25 percent stake to private equity firm

Private equity has a growing appetite for the retirement plan market

Feb 19, 2019 @ 4:38 pm

By Greg Iacurci

Ascensus, which administers retirement and college savings plans, has sold a 25% stake to a group of private-equity investors, the firm announced Tuesday.

Atlas Merchant Capital leads the investor group, which includes Singapore's sovereign wealth fund, GIC. The companies join two other private-equity backers, Genstar Capital and Aquiline Capital Partners, which bought Ascensus more than three years ago from another PE firm.

Private equity firms seem to have a growing appetitie for the retirement-plan market. Hellman & Friedman, for example, bought the 401(k) managed account provider Financial Engines last year for $3 billion. Blackstone Group acquired Aon Hewitt's record-keeping business in 2017.

The Ascensus deal, terms of which were not disclosed, is expected to close in the first quarter.

"The Atlas investor group has confidence in Ascensus' management and the company's future growth trajectory," said David Schamis, the founding partner and chief investment officer of Atlas, and a prior chairman of Ascensus.

Ascensus administers more than 54,000 retirement plans and more than 4 million 529 college savings accounts, according to its website. It does the record keeping for Vanguard Group's small-market 401(k) product, and has also been selected as the record keeper for some of the fledgling state automatic-enrollment, payroll-deduction IRA programs, such as those in Oregon, California and Illinois.

The firm has been on a buying spree of third-party administrators over the past few years. It bought more than 10 such firms last year, after buying around a half dozen in 2017, in a bid to grow its TPA Solutions business line.

Genstar and Aquiline bought Ascensus from another private-equity firm, J.C. Flowers & Co., in 2015, for a price tag of about $750 million, according to Bloomberg.

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