SCOTTISH Widows has forged ahead with the revamp of its asset management activities following its decision to strip Standard Life Aberdeen of a multi-billion-pound mandate earlier this year.
Widows, part of Lloyds Banking Group, has handed investment giant BlackRock a contract to manage £30 billion of assets in index strategies.
It comes after Lloyds moved to end Standard Life Aberdeen’s deal to run a £109bn mandate on behalf of Widows in February. Lloyds, which also owns Bank of Scotland, declared that its assets were now being managed by a direct competitor as a result of the £11bn merger of Standard Life and Aberdeen Asset Management last year.Aberdeen Asset Management has run the mandate, mostly pension money, since 2014, following its acquisition of the Scottish Widows Investment Partnership.
Standard Life Aberdeen is contesting Lloyds’ decision to axe its mandate, and disputes the bank’s claim that it was now in material competition with the bank. The matter is currently subject to arbitration.
BlackRock will begin managing the £30bn of assets when the arbitration process with Standard Life Aberdeen ends, or when the existing contract expires. Lloyds declared that its “remains confident in its rights to terminate the current management agreements”. It expects the arbitration to conclude early next year.
Antonio Lorenzo, chief executive of Scottish Widows and group director of insurance and wealth, said: “BlackRock has been selected following a competitive tender process in which it clearly demonstrated its global market leading capabilities and deep expertise in the UK market. The partnership will ensure that Scottish Widows and the group can deliver good investment outcomes for its customers over the coming years.”
Lloyds said it was close to finding a new manager for the other £80bn of assets under review.
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