Fascinating changes are underway in the UK asset management market reflecting the power of customers and the increasing pressure on management teams to deliver value.
As explained in this Financial Times article, Lloyds previously managed the Scottish Widows funds in-house until it spun off the management business late in 2013 for over $1bn to Aberdeen. Last year, Aberdeen was acquired by Standard Life for about $4.6bn to create the largest asset manager in the UK, with the Lloyds funds likely to be over a third of the acquired AuM. Now, just over four years after the original deal, Lloyds has announced that the contract is up for tender, citing competition concerns.
Standard Life Aberdeen has already impaired some of the intangible asset value recognised on the acquisition - it will be interesting to see how much more will be eroded if they do not retain much of the contact going forward.
Asset managers vie for £109bn Lloyds investment contract