Aberdeen Standard Investments strike Virgin Money advice tie-up deal

Aberdeen Standard Investments and challenger bank Virgin Money have agreed to establish a new joint venture for the provision of asset management service to customers.

As part of the joint venture, ASI will provide fund management services and access to its state-of-the-art digital technology.

Virgin Money currently has over 200,000 retail investment customers and £3.7 billion in assets under management. The joint venture with ASI will broaden Virgin Money’s retail investment proposition.

It will also extend ASI’s strength and depth in providing customer focused diversified solutions to Virgin Money’s existing investor base and leverage the strength of both brands to increase assets under management over time.

Under the terms agreed in principle, and subject to further mutual due diligence, regulatory and other relevant approvals and agreement of definitive contracts, ASI is expected to acquire 50 per cent of Virgin Money Unit Trust Managers Limited (“VMUTM”) for an upfront cash payment in excess of £40 million which is expected to result in an increase of approximately 40 basis points in Virgin Money’s CET1 ratio.

Jayne-Anne Gadhia, chief executive at Virgin Money, said: “Our new partnership with Aberdeen Standard Investments will bring together two outstanding innovative brands. We look forward to using our brand and customer reach, combined with ASI’s strength in asset management and its digital capability, to provide a market-leading customer proposition.

“This mutually beneficial relationship will give our customers a broader fund choice and the tools and capability to invest for the future with confidence. As a result, it offers a compelling proposition for our customers and offers excellent value for our shareholders. It is expected to generate significant growth in assets under management, drive additional capital-light returns and to be game-changing for our investment business over the longer term.”

Martin Gilbert, co-chief executive at Aberdeen Standard Investments, said: “We’re delighted to be partnering with Virgin Money to develop their retail investment business. Their customer focus mirrors that of Aberdeen Standard Investments and we look forward to working together and sharing a strong and profitable relationship over many years to come.”