Lloyds terminates Standard Life Aberdeen's management mandate

Kenny Wastell
15 February 2018

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Lloyds Banking Group is to terminate the contract of Standard Life Aberdeen, the parent group of Aberdeen Standard Investments, as manager of ТЃ109bn's worth of funds.

The move is a result of the merger between SL Capital parent Standard Life and Aberdeen Asset Management in August 2017. Lloyds said in a statement that the merger has resulted in a direct competitor to two of its divisions – Scottish Widows and Lloyds Banking Group Wealth – being in control of its assets.

Lloyds has begun a review of its long-term asset management arrangements to be implemented once Standard Life Aberdeen's notice period has terminated.

A spokesperson for Lloyds told Unquote the termination and subsequent review focuses exclusively on the management mandate and that it would not necessarily have any impact on allocations or the funds to which the divisions make commitments. The firm said in a statement that it would welcome Standard Life Aberdeen's involvement in the review, should the two parties be able to "resolve the competition issue".

Scottish Widows and Lloyds Wealth agreed a long-term contract with Aberdeen as its sole fund manager as part of Aberdeen's £650m acquisition of fund manager Scottish Widows Investment Partnership in November 2013.

The contract included a clause enabling Lloyds to withdraw the mandate should Aberdeen be subject to a change of control that meant a "material competitor" was managing its assets, according to the statement.

Lloyds agreed to delay a decision on reviewing the mandate for six months following the merger between Aberdeen and Standard Life, in order to facilitate discussions around "ways to build a successful relationship and address the competition issue", the statement said.

However the banking group said no agreement has been reached and it has therefore decided to terminate Standard Life Aberdeen's mandate.

Unquote was awaiting a response from Aberdeen Standard Investments about the impact on its activities in private equity at the time of publication.