Exclusive: Redington pensions consultancy set for £50 million investment deal

Two London entrepreneurs are poised to sell a stake in their fast growing pensions consultancy to private equity in a deal that could value it at £50 million.

The Evening Standard understands Phoenix Equity Partners is set to invest in Redington, which advises pension fund trustees how to ensure the savings pots they oversee will be able to pay scheme members when they retire.

Redington has won plaudits for its progressive policies on ethnic, gender and class diversity, which saw it become one of the few financial services firms with no gender pay gap.

The Phoenix deal, which could come by the end of the week, creates a partial exit for entrepreneurs Dawid Konotey-Ahulu and Rob Gardner, who left Merrill Lynch to form Redington in 2006, winning mandates to advise trustees on big schemes such as Royal Mail and Marconi. Another 38 of its 174 staff will also sell some of their shares.

Redington is seen as having shaken up an industry dominated by Willis Towers Watson, Mercer and Aon. The Big Three’s dominance was the subject of a 2018 probe by the Competition and Markets Authority.

The company, led for the past three years by chief executive Mitesh Sheth, will use the new investment to expand its operations overseas and in the UK. It has already begun selling its software to Chinese insurance companies and wants to further develop its consultancy client base in the UK and Europe beyond pension fund trustees to insurers, foundations and wealth managers.

Gardner quit full-time work at Redington to join wealth manager St James’s Place last year as director of investment management. He is expected to remain a non-executive, as will Konotey-Ahulu.    

Sources said Redington bosses considered a stock market flotation but selected Phoenix as its new backer because the private equity firm pledged to guarantee its independent future and culture.

Sheth’s progressive hiring programmes have made Redington far more diverse than the City norm for gender, age and ethnicity. It has an average staff age of 31 in an industry more often thought of as “old” and regularly hires school leavers. It eradicated its gender pay gap by implementing a “return to work” programme to help women return to the workplace after a career break.

Konotey-Ahulu is half Ghanaian and Sheth is Indian-British.

Redington revenues last year jumped 23% to £22.5 million.