Virgin Money and ASI are delighted to announce that they have agreed in principle to enter into a new strategic joint venture for the provision of asset management services to Virgin Money 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.
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.”
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.
Benefits of the strategic partnership
ASI will provide Virgin Money with access to their fund management expertise and market-leading digital capability, with a view to broadening Virgin Money's retail investment proposition.
This joint venture will enable Virgin Money to provide customers with access to a broader range of funds and solutions at a competitive cost.
The new joint venture provides a considerable opportunity for Virgin Money to develop deeper relationships with its existing customers, and use its brand to attract new customers and deliver significant growth in assets under management.
The combination of Virgin Money’s brand and scale and ASI’s market-leading investment solutions will provide a compelling proposition for customers and excellent value for shareholders.
Completion of the transaction is expected to take place by the end of 2018.
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