SCOTTISH Widows Investment Partnership should start growing again after Aberdeen Asset Management acquires the Edinburgh funds business, according to analysts at Canaccord Genuity.
The broker upped its target price on Aberdeen's shares to 586p from 520p, confident that the SWIP business will add diversification for a business currently heavily reliant on the performance of emerging markets.
The target suggests that Aberdeen's shares, which closed flat at 491p last night, could rise 19.3%.
In recent weeks, Aberdeen's share price has rebounded from a dip from the middle of 2013 when investors started fretting about the impact on emerging markets of monetary tightening in the United States.
Canaccord analyst Arun Melmane wrote in a note for analysts: "We attribute the value of the SWIP deal to the longer-term relationship with Lloyds, which should serve as a conduit for asset gathering.
"We attribute SWIP's recent outflows to a lack of focus within Lloyds as management has dealt with more pressing issues.
"The focus of Aberdeen's management team on asset gathering is likely to prove beneficial to AuM (assets under management) growth."
Aberdeen is paying about £550 million in shares to buy Edinburgh-based SWIP. The potential for another £100m in fees over the next five years should incentivise Lloyds to help with income growth, Mr Melmane said.
He added that the diversification that SWIP brings to Aberdeen should mitigate some of the recent emerging market-related volatility to hit the company. But he said that Aberdeen remains an emerging markets focused asset manager.
Mr Melmane said performance in emerging markets has been "soggy" recently as investors fret about the impact of expected tapering of monetary easing by the Federal Reserve.
"Aberdeen's investment philosophy targets longer-term growth dynamics , and we believe it is likely to perform better in volatile markets," he wrote.