Link Group an interesting IPO

Link Group is one of the more interesting IPOs to come market this year. Founded in 2000, Link started as a pure share registry business before entering super administration in 2005. Since then, the business has benefited from the shift towards outsourcing in super administration. Today Link manages 9 million super accounts and is the largest provider of super administration in Australia. The Superpartners acquisition, completed in December last year, offers a unique opportunity to cement Link’s dominant position in this market. Link has a fantastic record migrating clients’ members onto their platform, having completed 80 such migrations since 2008. We believe cost synergies from the Superpartners transaction will underpin robust earnings growth for the next three years. Longer term, the tremendous scale benefits in fund administration make it difficult for smaller providers to compete on cost. This strong position means that Link is likely to gain further clients if outsourcing continues.