Legal & General (L&G) is planning an attack on the workplace pensions provider owned by FTSE-100 lender NatWest Group as its chief executive seeks to increase its share of the UK pensions market.
Sky News has learned that L&G is one of a handful of suitors who have expressed interest in acquiring Cushon from NatWest.
This weekend, City sources said there was “significant” competition to buy the business and that L&G was unsure whether it would be the prospective buyer.
If a deal with L&G goes through, Cushon would strengthen a master trust business that manages more than £36.5 billion in assets, making it the largest commercial entity of its kind in the UK.
The main trust unit L&G serves 349 employers and 1.9 million members.
Cushon manages assets worth £3.7 billion, according to the latest figures provided by NatWest, which bought a majority stake in the business for £144 million two years ago.
The retirement industry serves approximately 650,000 members across approximately 21,000 employers.
NatWest owns an 85% stake in Cushon, with the remainder held by the subsidiary’s management.
For NatWest, a sale would reflect chief Paul Thwaite’s determination to refocus the bank – which shed the last vestiges of taxpayer ownership earlier this year – on its core strategic priorities.
These include a bank-wide simplification program and more active balance sheet and risk management.
Under Mr Thwaite’s leadership, NatWest has considered a small number of larger-scale acquisitions, including that of Santander UK.
This transaction did not go through due to NatWest’s determination to pay a price deemed attractive by its shareholders.
Cushon offers workplace pension products as well as a range of workplace ISAs, including Junior ISAs, Lifetime ISAs and general investment accounts.
NatWest’s acquisition of the business was intended to diversify its non-interest income by offering Cushon products to the bank’s commercial and business banking customers.
For Antonio Simoes, a former HSBC and Santander executive who heads L&G, an acquisition of Cushon would strengthen its offering in an important strategic area.
The government this year announced major pension reforms aimed at achieving greater scale and reducing unnecessary bureaucratic spending, with a view to enabling defined contribution schemes to manage at least £25bn of assets by 2030.
A NatWest Group spokesperson declined to comment on discussions with L&G, but previously said of a Cushon auction: “We do not comment on speculation.
“Our goal remains to meet the expectations of our customers. »
The identity of the other bidders for Cushon was unclear Saturday.
L&G declined to comment.