Revealed in 2018, established in 2019 and launched to retail investors in 2023, Virgin Money Investments aimed to bring asset management services to Virgin Money customers, with then Aberdeen Standard Investments offering “fund management services and access to its state-of-the-art digital technology”.
At the time, former ASI co-CEO Martin Gilbert said the firm looked forward to “sharing a strong and profitable relationship over many years to come”.
Known as Virgin Money Unit Trust Managers, ASI purchased a 50% stake in the firm for £40m plus capital adjustments of £10m, for a total sum of £50m.
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Today (14 February), Virgin Money purchased now-abrdn’s 50% stake for a cash payment of £20m, representing a 60% haircut on the original purchase price.
The acquisition has been funded entirely from Virgin Money’s existing capital resources, with the transaction expected to consume around 5 basis points of the bank’s Common Equity Tier 1 capital on the anticipated April completion date.
In the four years since the joint venture was established, Virgin Money Investments launched a digital platform and a range of investment products to retail clients in April 2023, with a pension added in November 2023.
The proposal includes the renewal of the investment management agreement between abrdn and Virgin Money, meaning the manager will continue to provide investment advice for Virgin Money Investments.
All employees of the joint venture will be brought under the Virgin Money business, with no job losses expected.
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Allegra Patrizi, managing director, business and commercial, at Virgin Money, said: “Our joint venture with abrdn has successfully delivered a new investment service offering simple and straightforward investment options for customers.
“Taking full control of Virgin Money Investments will mean we can bring the investments and pensions business together with our deposits, mortgages, credit cards and daily banking, enabling us to help more customers feel confident to invest for the future and driving significant growth in assets under management.”
A spokesperson for abrdn added: “Following our acquisition of interactive investor and ongoing efforts to streamline the business we have concluded that the joint venture with Virgin Money no longer aligns with our strategy.
“This simplification is consistent with our disciplined approach to capital allocation, while the renewal of the investment management agreement means we will continue supporting and participating in the growth of the venture.”
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