PENSCO Trust and Lincoln Trust have combined capabilities to become the largest independent custodian of alternative assets in the United States. Headquartered in San Francisco, the company will be called PENSCO and will have more than $10 billion in assets, 57,000 clients and operations across the country.
Because of the merger, PENSCO will expand the range of alternative assets clients can hold in tax-advantaged accounts to include investments in private equity, venture capital, start-up companies, real estate, notes and precious metals. It also will expand its advisor network, with the addition of 6,000 advisors who work with Lincoln Trust.
The transaction is expected to close in March and is subject to regulatory review by state regulators.
“PENSCO is creating a firm with institutional scale and national reach to handle the accelerating growth of alternative assets across the U.S.,” said PENSCO CEO Kelly Rodrigues. “After a decade of poor stock market performance, investors and advisors are increasing their asset allocation to alternative investments to rebuild wealth. At the same time, banks and broker-dealers are migrating alternative asset accounts to independent custodians that have special expertise to administer these complex assets. PENSCO will be at the nexus of these major changes in the investment retirement industry and is well-positioned to serve the needs of investors, advisors and institutions.”
PENSCO'S enhanced technology platform will streamline the process of investing in alternative assets in tax-advantaged accounts. PENSCO will now have the capability to create an all-electronic process for clients, advisors and investment sponsors. The platform's image document capabilities will minimize the physical movement of paperwork associated with account administration. PENSCO's straight-through-processing functionality will create a single, easy-to-use platform for all parties administering alternative assets.
“PENSCO is creating a seamless, integrated process that will enable individual investors, financial advisors, plan sponsors, attorneys and accountants to administer alternative assets more intelligently and conveniently,” Rodriques said. “By simplifying a time-consuming and paper-intensive process, PENSCO will make alternative assets more accessible to self-directed investors who want to diversify their portfolios by putting high-growth assets in IRA accounts.”
Lincoln Trust will retain its 401(k) business and remain an independent entity that provides a complete set of solutions to employer-sponsored retirement plans. Lincoln Trust is currently among the nation’s leading providers of open architecture 401(k) and other sponsored plans.
Located in Denver, Colo., Lincoln Trust provides trust, custodial, recordkeeping and administration services to open architecture 401(k) plans and other defined contribution plans.