Aberdeen Asset Management is expected to complete the takeover of Scottish Widows Investment Partnership next month and plans to axe 150 jobs from a combined 2500 workforce, sources have signalled.
Edinburgh would become the merged group's centre for global equities management, with Aberdeen remaining the headquarters for what would be Europe's biggest fund management group.
On a report yesterday, that Aberdeen planned to "turn round" the performance of SWIP, which had suffered net outflows of almost £7 billion in each of the past two years, and to make "significant cost savings from redundancies, outsourcing, contracts and the use of platforms", a source close to Aberdeen said: "The number of jobs affected will be relatively small, and it won't be 150 people clearing their desks on day one."
Rob Morgan, financial sector analyst at Charles Stanley Direct, said: "Aberdeen have already got a distribution sales force in place and SWIP also has a distribution network. The two are different and that is one of the reasons why the merger is quite a good fit but you would suspect there are some cost savings in that."
He said there was also "lots of overlap" in fund manager skill sets and teams, adding: "You would expect quite a lot of consolidation, as there was when Henderson took over Gartmore. The fund management industry in general is probably ripe for consolidation."
One Edinburgh fund manager said: "It buys (Aberdeen) some domestic distribution but it doesn't buy them talent as far as I can see." He said on past form Aberdeen might maintain fund manager roles initially but then rationalise them "quite aggressively" over the next 12 to 18 months.
Another experienced manager in the capital added: "They will think they can get economies of scale in manufacturing, marketing products, back offices, efficiency savings. The Edinburgh office of Aberdeen has 60 to 80 people, it is not just an outpost of Aberdeen in London, so I would hope that for Edinburgh it is quite positive."
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