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Clifton Asset Management is using a pension-led approach to change the alternative funding sector

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Visit the complete 2015 Everline Future 50 list

Name: Clifton Asset Management
Industry/sector: Finance
Date founded: 2011
Founder: Adam Tavener and Neil Greenway
Location: Bristol

Access to finance is often a barrier for those developing businesses and cash flow can usually be the reason companies fail.

Clifton Asset Management founders Adam Tavener and Neil Greenway believed that business funding and an innovative way to grow a retirement pot didn’t generally work well together – until it observed pension-led funding (PLF) to achieve both, which secured the company a position on this year’s Everline Future 50.

Chairman Tavener is a member of the CBI’s South West Council, a financial news columnist, and advocate of collaborative business lending which led him to participate in the Innovators in Finance Summit at 10 Downing Street to discuss business opportunities.

With Greenway by his side, the pair combined their financial services experience, which is considerable around pensions, to launch Clifton Asset Management and help directors explore the ways they could manage pensions ahead of retirement to benefit their businesses.

The team realised that the traditional structure of directors’ pensions was outdated and not appropriate for entrepreneurs. They explained: “Most director’s pensions are tied up in insurance company schemes they have accumulated with previous employers, only paying a modest return. This is not efficient for the individual or business; a radical solution was needed and PLF was developed.”

Essentially, PLF uses the director’s pension fund to support the business. If there’s sufficient value in the pot, it can be used to raise capital for the business.

They continued: “The pension funds are transferred to a new self-invested pension vehicle for the director, providing the opportunity for the pension to complete a loan to the directors company or to purchase a company asset releasing capital.

“A commercial repayment must be made by the company to the pension scheme providing a decent return, to the pension. Rather than interest on a loan or return on a lease arrangement going to a bank or third party, the return goes to the director’s pension fund; innovatively improving both the position of the pension and the business at the same time.”

The company highlighted that using a pension to support a business loan is done by other providers, but they require tangible security or personal guarantees. However, Clifton views intangible assets such as a company trademarks, copyright or patents as some of the most valuable assets of a business.     

Over the past year, the firm has released £24m to businesses and £200m to date, disrupting both finance and pensions.

Tavener and Greenway detailed: “PLF is unsettling the traditional pensions market, offering another option for individuals wanting to do more with their pensions and SMEs the ability to grow their business with the own funds. £2trillion sits invested in pensions in the UK when it could tapped into for other purposes until required for retirement.”

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