Marsh McLennan’s Mercer to Acquire Cardano

Rhea-AI Summary

Mercer, a business unit of Marsh McLennan (NYSE: MMC), announced its planned acquisition of Cardano, a UK and Netherlands-based long-term savings specialist managing around $66 billion in assets. The deal, expected to finalize by the end of 2024 pending regulatory approvals, aims to enhance Mercer's wealth management services. Cardano offers a variety of pension-related services, including fiduciary management and investment advisory, and operates the third-largest UK master trust platform. Approximately 550 Cardano employees will join Mercer post-acquisition. This strategic move is intended to expand Mercer's reach in the pension and institutional investment markets globally.

Positive

• Mercer will acquire Cardano, managing $66 billion in assets, enhancing their wealth management capabilities.
• Cardano's services include fiduciary management and investment advisory, supporting both DB and DC pension schemes.
• Cardano operates the third largest UK master trust platform, serving over two million savers across 27,000 employers.
• The acquisition is expected to close by the end of 2024, subject to regulatory approvals.
• Approximately 550 Cardano employees will join Mercer, strengthening their team with additional expertise.
• The deal positions Mercer as a leading pension provider in the UK and the Netherlands, expanding their global reach.
• The acquisition aligns Mercer's and Cardano's capabilities, aiming to deliver greater value to institutional investor clients.
• Cardano's differentiated model includes direct investment capabilities and external manager selection, enriching Mercer's offerings.

Negative

• The financial terms of the acquisition were not disclosed, leaving uncertainties about the cost and financial impact on Mercer.
• Regulatory approvals are pending, which could delay the expected closing by the end of 2024.
• The integration of approximately 550 Cardano employees may pose operational challenges and potential cultural clashes within Mercer.

Insights

Financial Analyst

The acquisition of Cardano by Mercer is a significant move in the pension and investment management industry. Cardano's $66 billion in assets under management (AUM) will considerably boost Mercer's asset base. This acquisition positions Mercer to strengthen its foothold in the UK and Dutch pension markets, which are among the largest in Europe. The fact that the transaction terms have not been disclosed leaves some uncertainty for investors, but the long-term benefits appear promising. The integration of Cardano's fiduciary management and investment advisory services with Mercer's broader global resources could potentially enhance service offerings and operational efficiencies. This move aligns with industry trends where larger firms absorb specialized entities to diversify and expand their services. However, challenges could arise in terms of integrating corporate cultures and systems, which could temporarily impact operational efficiency.

Market Research Analyst

From a market perspective, this acquisition underscores Mercer's strategy to expand its global reach and enhance its service portfolio. Cardano's expertise in the auto-enrollment market, particularly through NOW: Pensions, which serves more than two million savers, is a strategic asset. This positions Mercer to capitalize on the growing trend of mandatory workplace pensions, especially in the UK. Such a move signals Mercer's intent to not only solidify its position in the pension market but also to leverage Cardano's sustainable investment approach. Nevertheless, the success of this strategic decision will depend on how effectively Mercer can integrate Cardano's operations and retain its client base. The potential for cross-selling additional services to Cardano's clients also presents lucrative revenue opportunities for Mercer.

Pension Fund Expert

For pension clients, this acquisition means access to a more comprehensive range of services. Cardano's differentiated model, which combines direct investment capabilities and external manager selection, complements Mercer's existing offerings. This could lead to improved pension outcomes through enhanced investment strategies and risk management solutions. The timing of this acquisition also aligns with a growing focus on sustainable investment practices, which Cardano has a strong heritage in. The addition of approximately 550 Cardano colleagues to Mercer brings in substantial expertise that can enrich the service quality and innovation potential. However, pension clients should remain attentive to how the integration process unfolds and any changes in management practices or investment approaches that could impact their retirement outcomes.

NEW YORK--(BUSINESS WIRE)-- Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being, today announced that it reached an agreement to acquire Cardano.

Founded in 2000, Cardano is a long-term savings specialist in the UK and the Netherlands, with approximately $66 billion in assets under management¹. Terms of the transaction, which is expected to close near the end of 2024, subject to regulatory approvals, were not disclosed.

Cardano offers a range of fiduciary management, investment advisory services, and liability-driven investing and derivatives solutions to both defined benefit (DB) and defined contribution (DC) pension schemes in the UK and the Netherlands, the two largest pensions markets in Europe. Cardano adopts a differentiated model, offering a combination of direct investment capabilities and external manager selection, as well as deep pension expertise, a solutions mindset, and a long heritage in sustainability. Through NOW: Pensions, Cardano operates the third largest UK master trust platform², serving more than two million savers across 27,000 employers, with leadership in the structurally growing auto-enrollment market.

“We are excited about the opportunity to welcome Cardano to our Wealth business, which brings with it a high-quality team and complementary range of specialist investment capabilities,” said Michael Dempsey, Mercer’s Wealth President. “The acquisition and alignment of our expertise and capabilities represents a unique and timely combination to support pension clients and other institutional investors and their evolving needs.”

“Our combined talent and capabilities will position Mercer as the pension provider of choice in the UK and the Netherlands. This will allow us to continue to expand globally beyond pensions to serve other large asset owners, including endowments and foundations, family offices and insurers,” said Benoit Hudon, Mercer’s UK President and CEO. “As always, our aspiration is to drive even greater value for our institutional investor clients and help deliver brighter futures for millions of savers.”

“Mercer is the ideal long-term home for our business and clients,” said Michaël De Lathauwer, Cardano Group’s CEO. “We share an aligned culture with Mercer, focused on delivering excellent outcomes for clients, and together, we are committed to being the best solutions provider for UK and Dutch pension schemes. I am thrilled our clients and colleagues will have access to everything Mercer offers, including global resources, a deep bench of investment talent, strategic advice, manager research and alternative investment advice. We look forward to being one multi-disciplinary team and helping our clients navigate the evolving pension and investment landscape.”

As part of the agreement, approximately 550 Cardano colleagues in London, Nottingham and Rotterdam will join Mercer, upon completion of the transaction.

About Mercer

Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s more than 20,000 colleagues are based in 43 countries and the firm operates in over 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with more than 85,000 colleagues and annual revenue of $23 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn and X.

About Cardano

Founded in 2000, Cardano is a privately-owned investment management and advisory business with a focus on risk and sustainability. Widely recognized as a market leader, its c. 550 professionals support pension schemes and other long-term savings organizations in the United Kingdom and Europe (predominantly in the Netherlands) to secure better, resilient, and more sustainable financial outcomes for savers, employers, and wider society. For more information, visit https://www.cardano.co.uk/about-us/.

^{_______________________________________
1} As of December 31, 2023
² By number of members, as of December 31, 2023

View source version on businesswire.com: https://www.businesswire.com/news/home/20240611922730/en/

Media Contacts:

Amelia Woltering

Mercer

+1 347 703 5358

Amelia.woltering@mmc.com

Emily Cullen

Cardano

+44 (0)7718 325 409

e.cullen@cardano.com

Source: Mercer

FAQ

What is the significance of Mercer acquiring Cardano?

The acquisition enhances Mercer's wealth management capabilities, especially in the UK and Netherlands pension markets, and adds approximately $66 billion in managed assets to their portfolio.

When is Mercer expected to complete the acquisition of Cardano?

The acquisition is expected to close by the end of 2024, pending regulatory approvals.

What services does Cardano offer?

Cardano provides fiduciary management, investment advisory services, and liability-driven investing and derivatives solutions for DB and DC pension schemes.

How many employees from Cardano will join Mercer?

Approximately 550 Cardano employees will join Mercer upon completion of the transaction.

What is Cardano's position in the UK pension market?

Cardano operates the third-largest UK master trust platform, serving over two million savers across 27,000 employers.

What impact will the acquisition have on Mercer's global reach?

The acquisition will help Mercer expand globally beyond pensions to serve other large asset owners, including endowments and foundations, family offices, and insurers.

What are the expected benefits of Cardano's differentiated model for Mercer?

Cardano's model includes direct investment capabilities and external manager selection, adding depth to Mercer's investment solutions and enhancing their ability to deliver value to clients.