SCOTTISH Friendly is selling an administration business for "wrap" investments, which it built from scratch in 2006, to Citi for tens of millions of pounds.

A total of 134 staff in Glasgow are transferring to the US-based banking giant.

Fiona McBain, chief executive of the member-owned Scottish Friendly, revealed to The Herald yesterday that a key part of the deal had been a commitment by Citi to take on all of the employees in the business being sold and to keep the operation in Glasgow.

The administration business has wrap providers Nucleus and Aviva as key clients, with £4 billion of funds run on a platform featuring software customised by Scottish Friendly.

The wrap proposition allows people to view multiple investments, which might be part of their personal pensions or individual savings accounts, in one place.

Ms McBain attributed the decision to sell the business now to the chance to realise a “premium value” for members. She noted the industry view that there would be growth in “wrap” business, given the Financial Services Authority’s retail distribution review and forecasts of more people moving into self-invested personal pensions.

Both Ms McBain and Citi declined to reveal the price being paid for the business, but it is believed to be tens of millions of pounds. Ms McBain would say only that it was a “significant price for significant capability”.

Referring to the building of the wrap administration business from scratch, she said: “I am really proud of what we have achieved and really proud of the value that lets us deliver to our members. It is a massive capability and really clever stuff we are selling.”

She said that, as part of the deal, Citigroup would take over the St Vincent Street and West George Street sites of the wrap administration business. Scottish Friendly, Scotland’s largest mutual, will then have a single office, in Blythswood Square.

After the deal, Scottish Friendly will have about 100 staff. It has funds under management of about £800m, and 450,000 members, having added child trust funds to its traditional tax-exempt savings plans. It will also offer junior ISAs.

A spokeswoman for Citi, which employs about 250 people in Edinburgh, confirmed the commitment to keeping the operations being acquired in Glasgow.

She added: “There are no lay-offs. It is an investment in Scotland.”