• Deal driven by growth in defined contribution (DC) assets, up fourfold in a decade
• Motive acquired Mobius in off-market bilateral deal ahead of planned auction
• Growth will be largely organic, with selective bolt-on acquisitions in the UK market

Motive Partners’ acquisition of UK pension investment platform Mobius is a bet on the rapid transformation of the UK pension system, as defined contribution (DC) schemes grow in scale and seek broader access to private markets funds.

The specialist fintech investor agreed to acquire Mobius from Phoenix Equity after tracking it for several years, viewing it as critical infrastructure for the rapidly growing part of the retirement market, Motive’s founding partner and head of investments at Scott Kauffman told Mergermarket.

Britain’s pensions market has steadily shifted from a largely defined benefit (DB) to a DC system, particularly since Automatic Enrolment was introduced in 2012 as a major pension reform.

The DC segment grew from GBP 324bn in 2015 to GBP 1.2tn in 2024, as per a report from the Pensions Policy Institute. Meanwhile, DB assets have gradually declined as schemes mature and close to new members.

Motive believes now is a good time to invest in Mobius, particularly as the company has followed that market shift. Over the last three years, Mobius has built out its DC product after starting out in the DB pension administration space, Kauffman said.

As an open-architecture platform, Mobius enables DC pension schemes to access, administer and switch between multiple external fund managers through a single wrapper.

“The independent platform enables you select funds across equities, fixed income funds, private market funds, and broader alternative investments, and blend that into one investment portfolio for the pension scheme,” he explained.

Out of the GBP 30bn Mobius has in assets under administration, more than 75% are now in DC pension assets, he added.

The group was able to secure Mobius through an off-market bilateral deal with Phoenix, he noted. But the company had been of interest for several years, according to Motive’s partner Neil Cochrane, who has known Mobius’ chairman Steve Groves since 2009 through their work in the insurance industry.

“We’ve been knocking on the door over the last few years asking if the time was right to engage, and we finally got the go ahead towards the end of last year,” Cochrane said.

That connection ultimately enabled Motive to begin discussions ahead of an auction process that was planned for later this year, according to Kauffman.

Although financial terms are not disclosed, the deal is expected to generate more than a 3x gross multiple of cost for Phoenix’s 2016 fund, according to a company announcement.

The transaction will be made from Motive Capital Fund 2, which closed in 2022 with USD 2.54bn of commitments, alongside co-investment vehicles.

Selective M&A

The acquisition also fits with Motive’s increased focus on wealth management, where the sponsor has been actively pursuing investment opportunities across Europe and the US, Kauffman said.

The GP exclusively focuses on six core segments within fintech: wealth & asset management, banking & payments, insurance, capital markets, AI data & analytics, as well as business services.

“We consider the retirement space as part of the wealth thesis. Given the fact that we’ve invested so heavily across the wealth technology value chain, we’ve started to pivot a bit more on the retirement pension space over the past 18 months or so to find new opportunities,” Kauffman said.

Apart from its DC solutions, Mobius has also entered the wealth space through launching a Self-Invested Personal Pension (SIPP) for a digital-focused wealth manager, he said.

This enables underlying customers to select a broad array of funds and asset classes as well as gain access to institutional pricing, he noted.

Mobius has further expanded its wealth client base since then, and Motive believes it can accelerate that growth, given its differentiated ecosystem and connectivity as a specialised player in the space.

Kauffman noted that the transaction is four to six months away from regulatory approval. Once completed, Motive plans to partner with Mobius’ management team to deliver a largely organic growth plan, supported by favourable trends in both the DC pensions and wealth markets, he said.

Cochrane pointed to recent Mansion House pension reforms that will double DC pension investments into private markets, as a strong long-term driver for Mobius’ client growth.

The firm could also selectively explore bolt-on acquisitions to add capabilities in the UK market, though that would be much further down the road, Cochrane said.

“We could look at M&A from a product extension perspective,” Kauffman added.

Mobius’ growth trajectory on both the institutional pensions and wealth fronts will make it an attractive asset for a broad range of future buyers, the founding partner said.

“What makes this investment attractive is the scarcity value of Mobius in the markets that they’re in,” he said. “It’s not just a pension play. When we further build out the wealth piece of the company across the UK, we believe it will be very attractive to a lot of wealth technology platforms today that want to enter or expand into the UK.”

Founded in 2016, Motive has offices in New York, London and Berlin. The group has raised USD 6.4bn and completed 67 investments from venture to growth and buyout across North America and Europe, with a focus on financial services and business services companies, its website states.