The move comes a year after L&C approached a number of Sipp providers about a possible sale, after new capital adequacy rules, due to come into force from September 2016, signalled a move towards market consolidation.
However, L&C has decided to raise new capital to fund an acquisition as well as buying out minority shareholders.
Head of product at L&C, Adam Wrench, said: “There are many of us within the business that see great potential for the future of the London & Colonial group and we are therefore in the process of obtaining new capital investment which we hope to have in place very soon.
"It has also been no secret that a few of our longstanding minority shareholders have wanted to exit the company in recent years.
“The MBO team are seeking to raise the new capital in order to develop the business, make a potential acquisition and expand distribution of its products and services. The company will also use some of the development capital to buy back shares from any minority shareholders that wish to exit.”
Launched in 1995 by chief executive Ken Wrench and chairman and Pinsent Mason’s head of strategic development for pensions Robin Ellison, L&C also offers Sipps and Ssas products.
Last April, the firm launched a new flexible Sipp product, The Simple Investment Sipp, giving savers greater choice of investments and more drawdown options in response to the pension freedoms, which were also introduced that month.