John McMurtrie

Link Administration Holdings (ASX:LNK) has entered into a binding agreement to acquire Pepper European Servicing (PES) from Pepper Group for an upfront consideration of  €165 million (~A$266 million) and up to a further €35 million (~A$56 million) if certain total Assets Under Management (AUM) thresholds and growth milestones are met.

PES provides end-to-end loan servicing, advisory and asset management across both residential and commercial segments.  The business has well established operations in the UK and Ireland underpinned by longstanding customer relationships as well as a growing presence in the emerging markets of Spain, Greece and Cyprus.

At 31 December 2019, PES had total AUM of circa €40billion (~A$65 billion) and generated revenue of €92.9 million (~A$149.9 million) and achieved a normalised EBITDA of €20.1 million (~A$32.4 million) for the year ending 31 December 2019.  The upfront acquisition price implies an Enterprise Value (EV) to EBITDA multiple of 8.2x or 6.0x after taking into account anticipated efficiency benefits and deferred payments for existing AUM protection.

The transaction accretion to Link Group’s Operating EPS[1] is expected to be greater than 10% from year one (pre-efficiencies and one-offs) with anticipated synergies expected to deliver 5%-6% further earnings accretion upside.

The acquisition is subject to relevant regulatory approvals and is expected to complete in the second half of calendar 2020. On completion, the business will be integrated with Link Group’s BCM business.

Link Group’s Managing Director, John McMurtrie, said: “This is an attractive transaction for Link Group. It provides an opportunity to integrate two high-quality businesses to create a leading pan-European asset servicer and manager, that is well positioned to capture growth opportunities across the region.

“PES is highly aligned to Link Group’s existing BCM business in the UK and Ireland with strong annuity style earning characteristics.  The combined business will also be strategically positioned to capture further growth opportunities in other European markets with PES’ established operations in Spain, Greece and Cyprus complementing Link Group’s established operations in the Netherlands and Italy,” Mr McMurtrie said.

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From Lef

Link Group (ASX: LNK), a leading global administrator of financial ownership data, has unveiled new mobile apps and voice-recognition capability, expanding the ways investors and shareholders engage with Link Group and its clients through digital channels.

Reflecting Link Group’s ongoing investment in technology, Link Group has announced the launch of a new mobile app for the Link Investor Centre platform and a new voice-activated assistant on Google Home, both of which will make it easier for investors to manage their share portfolios.

Link Investor Centre mobile app

The new Link Investor Centre mobile app offers a secure mobile platform for retail investors to access and manage their investments.

The app allows investors to quickly access information about their shareholdings and make updates to their account such as confirming payment instructions and advising communication preferences, via their mobile phone. Users can view payment history, access details of upcoming annual general meetings and submit votes online, all with the convenience and peace of mind of fingerprint authentication and PIN security options.

The app, available in both the App Store and Google Play Store, will be rolled out in Australia and New Zealand with other markets to follow shortly.

Voice-recognition technology

Link Group has also tapped into the increasing popularity of voice-activated tools, launching natural language assistants on both Google Home and through the Link Investor Centre to enable users to verbally ask for detail and information on how to manage their shareholdings.

Investors with Link-administered shares will now be able to use Google Home or the associated Google Assistant mobile app to ask real-time questions to the Link Market Services Assistant and receive helpful information on a range of topics, such as dividend payments, selling shares and updating personal details.

“By talking to the Assistant, investors can easily and quickly obtain information, without the hassle of sifting through web pages for the answer. Our new voice-recognition technology allows you to simply ask a question to access important investor information.

“The Assistant can answer common questions, such as ‘how do I sell my shares?’ and ‘how do I know the value of my shareholdings?’ Over time, capability will expand to provide more in-depth information about an investor’s individual account details via this channel,” said Link Group’s Technology & Innovation CEO Paul Gardiner.

Voice-recognition technology aligns with Link Group’s goal of making financial information and education more readily accessible to the everyday investor.

“Link Group is continually responding to how users are choosing to communicate and giving them tools that cater to their needs. That is why we developed natural language assistants, so that investors can talk to Link Market Services anywhere, at any time,” Mr Gardiner said.

Driving investor engagement

The latest additions to Link Group’s digital capabilities provide investors with more choice in the communication channels they can employ to manage their investment portfolio.

“Link Group will continue to invest in cutting-edge technology to empower investors to play a more active role in their portfolios and to support companies in creating more meaningful interactions with their shareholders.

“The market-leading product and technology solutions we offer allow us to be a true partner for our clients,” Mr Gardiner concluded.

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John McMurtrie

Leading superannuation administration, data analytics and registry company Link Group yesterday announced the location of its new Melbourne offices at 727 Collins Street, Docklands.

Having invested more than $300 million in technology and systems over the last seven years, and more than doubled its workforce, the decision to establish a new Melbourne base is part of Link Group’s global growth strategy.

The custom-designed 20,000sqm space will be over 10 floors in Tower 4 of Collins Square, one of five interconnected commercial towers designed by award-winning Melbourne architectural firm Bates Smart.

Due for completion in mid-2016, Link Group has secured naming rights to the building, which will bring together Melbourne-based staff from various business units including Link Market Services, AAS, Superpartners, Empirics and Syncsoft.

Last night about 100 Link Group staff attended the launch party at Collins Square, having entered a staff ballot to attend the event at a “mystery location”.

Link Group Managing Director John McMurtrie said: “We’re excited to finally announce the details of our new office to accommodate our growing presence in Melbourne. Our new Collins Street base reinforces our long-term commitment to investing in people as well as technology, and we’re aiming to build on the success of our current superannuation service and technology hub at Rhodes in Sydney.”

Originating in Australia in 2002 as Link Market Services, Link Group has grown over the past decade to become a leading superannuation administration, data analytics and registry company, offering a range of information, technology and service solutions to its global network of superannuation and corporate clients.

The organisation is structured across four core business divisions: Pensions & Superannuation (which includes AAS, Superpartners, Link Super and Money Solutions), Information & Data Services (which includes Empirics, Syncsoft and CMR Direct), Corporate Markets (which includes Link Market Services and Orient Capital) and Property Services.

Focus on service as integration continues

The integration of Superpartners into Link Group will see Superpartners’ client funds transitioning onto Link’s Pension & Superannuation business platform, aaspire, over the next two years.

To lead the project, Link Group appointed former CEO of IQ Group, Graham Sammells, as Head of Integration. Mr Sammells will be responsible for overseeing fund transitions, as well as other aspects of integration, including the establishment of a model office, client engagement and move to the new Melbourne office.

Mr McMurtrie reinforced Link’s priority of maintaining quality service across existing superannuation clients during the transition period.

“Our focus is to continue to providing high levels of service to all our super fund clients, and developing our technology capabilities to deliver innovative products and operational efficiencies. Planning for the transition of new funds onto aaspire is progressing smoothly, and we will continue to invest in our people and systems, leveraging our growing scale to deliver the best outcome for all our clients,” Mr McMurtrie said.

Link Group Pensions & Superannuation division administers more than 70 funds, managing on their behalf more than 10 million member accounts and 1 million employers.

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Under the proposed transaction, Link will acquire 100% of registrar services. The transaction is subject to certain approvals.

Based in Eschborn, near Frankfurt, registrar services is part of Deutsche Bank’s Global Transaction Banking division. The company is a pioneer in share registry services in Germany and has long-standing relationships with large cap companies like Deutsche Bank.

As part of the Link Group global network, Link Market Services is active in share registry, superannuation administration and shareholder and member analytics. In share registry, the Link Group is active in Australia, New Zealand, India and South Africa with a sister company operating in the United States and Canada.

Satvinder Singh, Head of Trust & Securities Services/Cash Management Financial Institutions in Deutsche Bank’s Global Transaction Banking, said:  “In line with Deutsche Bank’s strategy of focusing on its core competencies, we are pleased to have found a specialized partner that will continue to offer Deutsche Bank and its clients high quality share registry and shareholder services. In Link, we have found a committed partner that will also execute the transition sensitively and continue to invest in the acquired business.”

John McMurtrie, Managing Director and a Board Member of the Link Group: “This is an exciting transaction for Link as it broadens our global footprint and increases our exposure to the important EMEA market. As a leading provider of shareholder services, we are committed to growing this business with alignment to our existing platform. We look forward to working with Deutsche Bank and its clients.”

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Changes to super will reduce paperwork.

The coming three months will see Australian employers and their myriad of superannuation providers digest some of the biggest systems reforms since the introduction of the GST.

The joint employer and super industry effort will deliver Australians one of the most streamlined retirement systems in the world – enabling people to consolidate funds or change their provider in days without cumbersome paperwork.

According to Link Group (Link), Australia’s leading super administrator, the upcoming changes to electronic contributions and rollovers for superannuation funds will have the most transformational impact on Australia’s super system since the savings scheme was introduced.

As part of the wide ranging Stronger Super reforms, four key deadlines are looming for the industry and employers:

• From 1 January 2014, all APRA regulated super funds must process and fund a member rollover request within three days – rather than the current 30 days.
• From 1 January 2014, all APRA regulated super funds must be compliant with sending and receiving electronic rollover (eRollover) instructions.
• From 1 July 2014, all Australian employers with more than 20 employees will be required to send employee super contributions electronically (eContributions).
• From 1 July 2015, all Australian employers will be required to send eContributions resulting in 800,0001 employers potentially being affected by eContribution changes.

John McMurtrie, Managing Director of Link and chair of super administrators industry group, Affiliation of Superannuation Practitioners, said the industry was likening the impact of eContributions changes to the introduction of GST, fundamentally altering the way businesses interact with clearing houses, payroll systems, superannuation administrators and funds.

He said while many employers were already making super contributions electronically, anecdotal evidence suggests approximately half of companies across Australia still used some form of paper-based instructions.

“The changes signal a major coming of age for our superannuation system and now require the time and attention of all employers. After 20 years, the days of receiving employee contribution cheques with instructions written on the back of a pizza box or Post-It note are coming to an end,” Mr McMurtrie said.

He said the changes would substantially benefit all players in the long run, but in the short term the pressure was on super funds as well as employers to establish how they can best comply with the new rules while maintaining reasonable costs for members.

McMurtrie also suggested that the incoming Government reduce red tape by abolishing the $3,800 fine to be levied on employers who contribute non-conforming data.

Easing the transition

To ensure a smooth transition, Link is working closely with the ATO to pilot eContributions before 1 July 2014, minimising the impact to businesses while still ensuring the rigour and efficiency of digital contributions.

“As part of the consultation process, we are working with the Government and regulators to look at range of e-Contributions solutions. Many employers are already adopting a form of eContribution payments which may not be specifically compliant with new ATO standards. We believe these non-compliant systems, which effectively provide the same outcome, should be accommodated in order to minimise compliance costs for employers,” Mr McMurtrie said.

Link is the first administrator to be fully compliant with each wave of the new regulatory deadlines, making the industry’s first official eRollover transaction for AIMST, Christian Super and Russell Superannuation Master Trust under the new system on 26 August this year. Major super fund administration clients such as REST, CARESuper and Kinetic are also fully compliant with the eRollover requirements ahead of deadline.

Changes expected to awaken members

From 2014 Australians will also see major improvements in the ease with which they can change super funds – including the ability to switch funds online.

While prompting improved fund consolidation, the easier rollover processes may also see an increase in fund switching, and have coincided with some of Australia’s leading super funds redoubling their marketing presence in an effort to attract and retain members.

According to McMurtrie, changing or consolidating super funds has proved so cumbersome to date and conservatively estimate that more than half of people who embark on the process end up giving up before the process is completed.

“Members are fed up with the red tape around their super and we are pleased to be leading the charge amongst administrators to drive home reforms that will ultimately benefit every Australian – in particular the opportunity for people to feel more in control and to become more engaged with their super fund,” Mr McMurtrie said.

He said a more mobile member base would continue to put pressure on super funds to offer a best of breed suite of investment, insurance and other services – while still maintaining competitive costs.

McMurtrie also recommended that the complex, risky and very expensive Government initiated auto-consolidation program be dropped.

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John McMurtrie

Link Group (Link), Australia’s largest and fastest growing third party record keeping company, has cemented its market leadership in the superannuation administration space, today announcing the acquisition of Syncsoft, Australia’s leading software vendor for APRA regulated superannuation funds.

The move will enable Link to substantially expand its current client base of super funds who choose to outsource their superannuation administration, to include funds who administer in-house via the Syncsoft platform, as well as hybrid administration arrangements.

Syncsoft provides technology and software services through its leading Capital superannuation administration software. Designed to automate and streamline administration processes for major superannuation funds, clients currently using Capital include the $16bn Western Australian public sector GESB, $36bn UniSuper and Comsuper, the agency responsible for administering the major superannuation schemes available to the Australian Defence Force and the majority of Australian government employees.

The acquisition further builds on Link’s core administration offering to wealth managers and superannuation funds, with Link now providing administration support for over six million superannuation members on its platforms.

John McMurtrie, Managing Director of Link, said the acquisition builds on Link’s strategy to own and continually invest in platforms it operates.

“Syncsoft strongly complements our existing offer to superannuation funds, allowing us to not only broaden our family of clients across industry, public sector and corporate funds, but to have new conversations around our value added solutions with funds currently using the Capital software,” Mr McMurtrie said.

“Super administration is Link’s core competency and the addition of Syncsoft further increases our economies of scale and delivers the ability to service all funds – including those which currently retain administration in house on platforms and technology owned by Link.”

Responding to member demand

In addition to core member administration services, Link offers a range of value added services to funds including data analytics (via Empirics), financial advice (via Money Solutions), an integrated clearing house, and a Direct Investment Option which allows funds to offer members increasingly popular direct investment options such as the ASX300, ETFs or Term Deposits.

Mr McMurtrie said the ability to offer a robust and flexible administration infrastructure in addition to key value added services was now critical for funds as technology continues to advance and competition for members intensifies.

“Through joining forces with Link, Syncsoft will be able to continue enhancing its Capital offering by integrating the value added services provided by Link such as the effective management of big data, direct investment options and automated APRA reporting,” Mr McMurtrie said.

Syncsoft will continue to operate from its Melbourne office with all 78 employees joining Link. Rory Wainer, Managing Director and founder of Syncsoft, will remain in charge of the business while also expanding his role to leverage Syncsoft’s intellectual property across all of Link’s subsidiaries.

“We’re excited to have Rory, a true innovator and leader in financial services technology, join the Link family. His story is truly remarkable, starting Syncsoft in the 1990s with the mission of building a genuine scalable institutional wealth management administration platform.”

“Today it is clear he has achieved his mission and the company has remained at the forefront of industry solutions for over 20 years. We believe this is just the beginning as we partner with Rory to expand Syncsoft’s offering to an even wider audience, not just for superannuation but wealth administration across the globe,” Mr McMurtrie said.

This wider audience includes offering administration services globally including New Zealand and China where the Capital software has already been adopted due to its robust yet customisable nature.

Mr Wainer shared his excitement about the prospects of joining the Link Group: “Being part of the Link Group was the logical next phase for Syncsoft and Capital utilising the Group scale and capability to expand the Capital platform more rapidly than otherwise possible. We were impressed by Link’s culture and commitment to be a genuine industry leader through their investment in people and technology to deliver superior long-term outcomes.”

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