Aberdeen Asset Management's purchase of Edinburgh-based Scottish Widows Investment Partnership from Lloyds Banking Group is beneficial for all parties, but particularly the buyer, which becomes the largest publicly traded fund manager in Europe, according to Haig Bathgate, Chief Investment Officer Turcan Connell Asset Management.
For Lloyds, the deal helps it bolster its capital position, and for SWIP, the acquisition clears up uncertainty that had surrounded the fund business for many months. On the downside, the purchase means a rationalisation of any overlap between the two companies. In SWIP's case, this initially might mean fewer jobs in equity management, where Aberdeen already has a substantial business.
Still, SWIP has successful fixed-income and property investment businesses that will have formed part of the attraction for Aberdeen, and jobs in those areas are likely to be retained in Edinburgh. And if the combination results in more clients giving more money to the business, that might in the end mean additional investment managers being taken on at the company.
However, it looks like Aberdeen stands to benefit most from the transaction. The purchase, which also includes an Investment Solutions business, gives the fund manager access to Lloyds vast customer base. Given the fact that stock markets have risen so much over the past year, investors might have expected Aberdeen to pay an inflated price. The advance in Aberdeen's shares after the announcement means the market thinks the company got a good deal.
This content was generated prior to Turcan Connell Asset Management Limited operating as Tcam.