Is auto enrolment London's next technology cash cow? L&G seems to think so: it's invested more than £3m in London pensions firm Smart Pension - which is barely a year old.
Although it hasn't disclosed exactly how much it spent, City A.M. understands the figure was higher than Smart Pension's last funding round, earlier this year, in which it raised £3m. Some of its previous investors also put in cash this time around, pushing the full funding round to way above that figure.
Emma Douglas, head of L&G Investment Management, will take a non-executive seat on Smart Pension's board as a result of the deal.
Smart Pension was launched back in May 2015, with the aim of helping small firms simplify the process of auto enrolment pensions, which were made mandatory by the government in 2012. Figures by the Pensions Regulator suggest just 35 per cent of small employers actually understand auto-enrolment.
Today L&G Investment Management chief executive Mark Zinkula said its interest had been piqued by Smart Pension's "powerful digital platform, which has made auto enrolment scalable and affordable for employers and their employees".
“This partnership with Smart Pension represents an excellent opportunity not only for us to invest in an exciting, forward-thinking British business, but also to make a real difference in the battle to ensure auto enrolment becomes the scalable and unshakable success it deserves to be, even for the smallest employer.”
Smart Pension chief executive Andrew Evans added: “The market has responded very positively [to our launch] – we have already signed up thousands of employers and advisers and are now enabling tens of thousands of employees to save into a pension for the first time."