Lane Clark & Peacock eyes KPMG UK pensions advisory arm

Earlier in 2019, KPMG was reported to be exploring the sale of its UK pensions practice. Now, as the firm continues to mull divesting from the lucrative wing, Lane Clark & Peacock is reportedly in the running to buy it up, with backing from private equity firm Inflexion.

Talk of the Government being forced to break up the UK empires of Deloitte, EY, PwC and KPMG on grounds of conflicting interests between their consulting and accounting wings has reached a fever pitch in the last year, leaving the quartet considering how to quell the growing dissent they face.

KPMG, the smallest of the foursome, has been hardest hit by the situation, and has routinely been singled out by the UK’s accounting watchdog for its auditing standards. Against this backdrop of reform across the accountancy and consulting professions, KPMG confirmed it would restructure its UK auditing business – having already barred its firm from holding both consulting and accounting contracts for UK clients – before flirting with the sale of its pensions practice.

Now, according to reports from Sky News, one of the UK's largest independent financial consultancy firms is plotting a £200 million takeover of KPMG’s pensions advisory arm. Lane Clark & Peacock (LCP), which is backed by the buyout firm Inflexion, is understood to be among the front-runners currently bidding for the KPMG unit, competing against a number of trade and financial bidders.

According to the firm’s website, LCP already provides actuarial and investment advice to hundreds of clients, including roughly one-third of the FTSE 100. KPMG’s pension wing has around 20 Partners within the business and an estimated £50 billion under advice, making it a logical target for the firm’s expansion ambitions. The take-over is said to be worth £200 million, and is backed by private equity firm Inflexion.

LCP reported a record income for the financial year 2018/19, posting a total of £114.9 million, an 8.5% increase from 2017/18. Amid these bullish results, the firm has also been developing new innovations and technological offerings, and reports growth in traditional areas. LCP was lead adviser on 10 buy-in and buy-out transactions over £100 million during 2018, including major transactions for the pension plans of Marks & Spencer and Littlewoods.

Speaking at the announcement of the firm’s results, Aaron Punwani, LCP CEO, commented, “This year has been a phenomenal year for LCP, with our talent base, client portfolio and industry reputation reaching new heights. As we increase and expand our expertise beyond the traditional pensions market, our priority will still be to provide independent and client focused service as well as offering exciting career development opportunities for talented individuals.”