STANDARD Life Aberdeen will pay a least £40 million for a near-50 per cent stake in Virgin Money’s retail investment business as the terms of a proposed joint venture between the two were agreed yesterday.
The asset management giant hailed the agreement, struck by its Aberdeen Standard Investments (ASI) brand, as an “important milestone” in pursuit of the partnership with Virgin Money Unit Trust Managers (VMUTM), first proposed in March.
And Virgin declared the joint venture would transform its retail investment proposition, allowing it to offer a broader range of investment and pension solutions. Virgin Money currently has around three million customers but that will double when its merger with CYBG, owner of Clydesdale Bank, completes. The bank said the joint venture would build on the £3.7 billion under management at VMUTM and “drive significant growth in funds under management and capital-efficient returns”.
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The deal comes as Standard Life Aberdeen battles net outflows from its flagship GARS (Global Absolute Return Strategies) fund, which have yet to be stemmed since the merger of Standard Life and Aberdeen Asset Management in 2017.
Virgin and ASI noted their joint venture would, subject to regulatory approval, combine Virgin Money’s brand, scale, and retail distribution expertise with ASI’s “market-leading” investment solutions, asset management technology and digital expertise. The Sale and Purchase Agreement would see Virgin Money sell 50 per cent less one share of VMUTM for £40m upfront, plus 50% of an amount representing the capital in the business at completion, and certain other costs.
Martin Gilbert, co-chief executive of ASI, said: “ The partnership offers a fantastic opportunity to develop a business that combines the best talents of Virgin Money and ASI. Most importantly, the joint venture will offer customers across the enlarged CYBG group... with investment solutions to help them achieve their long-term financial goals.”
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