Virgin Money and Aberdeen Standard Investments seal new investment and pensions joint venture
- Strategic joint venture is expected to transform Virgin Money’s retail investment proposition, building on current £3.7 billion funds under management (as of June 2018) to drive significant growth in funds under management and capital-efficient returns.
- Sale and Purchase Agreement (SPA) signed, including a conditional agreement for Aberdeen Standard Investments (ASI) to acquire 50 per cent (less one share) of Virgin Money Unit Trust Managers Limited1 (VMUTM) for an upfront cash payment of at least £40 million.
- Joint Venture to offer investment solutions over time to CYBG’s entire six million customer base following its acquisition of Virgin Money.
- The transaction is expected to complete in (calendar) Q2 2019, subject to regulatory approval.
After announcing an agreement in principle for the strategic joint venture on 20 March 20182, Virgin Money and ASI today confirm that they have signed a conditional agreement for the sale by Virgin Money to ASI of 50 per cent (less one share) of VMUTM and agreed the key terms of the strategic joint venture offering market-leading investments and pensions propositions.
The proposed joint venture, subject to regulatory approval, will combine Virgin Money’s brand, scale and retail distribution expertise with ASI’s market-leading investment solutions and asset management technology and digital expertise.
As a result of CYBG’s acquisition of Virgin Money in October 2018, the joint venture will now, over time, offer investment solutions to CYBG’s combined customer base of six million customers, expanding beyond Vigin Money’s existing three million customer base.
Under the terms of the SPA, Virgin Money will, subject to certain conditions (including regulatory approval), sell ASI 50 per cent (less one share) of VMUTM for an upfront cash payment of £40 million plus 50% of an amount representing: (a) the capital in the business at completion3; and (b) certain other costs.
The joint venture will enable Virgin Money to provide customers with access to a broader range of funds and solutions at a competitive cost, and is expected to transform Virgin Money’s retail investment proposition, driving significant growth in funds under management and capital-efficient returns as well as offering excellent value for shareholders.
David Duffy, Chief Exective of CYBG, owner of Virgin Money, Clydesdale Bank and Yorkshire Bank, said: “We are delighted to take the next step forward in our partnership between Virgin Money and Aberdeen Standard Investments, enabling us to provide innovative and attractive investment solutions across the Group’s six million customer base, through our national distribution. Using our brand and customer reach, combined with ASI’s clear asset management strengths we will be able to provide a truly compelling investment and pensions proposition to our retail customers.”
Martin Gilbert, Co-Chief Executive at Aberdeen Standard Investments, said: “The signing of the SPA that encompasses Virgin Money, Clydesdale Bank and Yorkshire Bank customers is an important milestone in progressing our joint venture with Virgin Money. The partnership offers a fantastic opportunity to develop a business that combines the best talents of Virgin Money and ASI. Most importantly, the joint venture will offer customers across the enlarged CYBG group, beyond Virgin Money’s existing customer base with investment solutions to help them achieve their long-term financial goals.”
CYBG Press Office:
+44 (0)800 066 5998
James Thorneley, Aberdeen Standard Investments:
+44 (0)20 7463 6323
1 Virgin Money Unit Trust Managers Limited (VMUTM) is the entity which holds Virgin Money’s Investments and Pensions business offering a range of investment products, including unit trusts, pensions and stocks and shares ISAs.
3 For the purposes of calculating the consideration, intangible assets will be excluded from the capital figure to the extent any remain in VMUTM on completion.
- With over 1,000 investment professionals we manage £557 billion** of assets worldwide. We have clients in 80 countries supported by 50 relationship offices. This ensures we are close to our clients and the markets in which they invest.
- Aberdeen Standard Investments is a leading global asset manager dedicated to creating long-term value for our clients, and is a brand of the investment businesses of Aberdeen Asset Management and Standard Life Investments.
- Aberdeen Standard Investments is the asset management business of Standard Life Aberdeen plc, one of the world’s largest investment companies.
- Standard Life Aberdeen plc is headquartered in Scotland. It has around 1.2 million shareholders and is listed on the London Stock Exchange. The Standard Life Aberdeen group was formed by the merger of Standard Life plc and Aberdeen Asset Management PLC on 14 August 2017.
- **Standard Life Aberdeen AUM/AUA is £610 billion as at 30 June 2018.
- CYBG PLC is the UK’s sixth biggest bank offering a true alternative to the status quo in banking. Operating under the Clydesdale Bank, Yorkshire Bank, B and Virgin Money brands, we are the only Bank outside the ‘Big 5’ that boasts a genuine full-service retail and SME capability.
- We serve over six million customers across the UK through an omni-channel model of online, mobile and telephone banking and we have a national network of 250 branches and business banking centres.
- Our ambition is to offer the best service in UK banking, providing customers with market-leading functionality and innovative products, supported by robust technology and a first class, personal customer experience.
- In February 2016, we completed our IPO from National Australia Bank, regaining our independence for the first time in almost 100 years. CYBG completed the acquisition of Virgin Money on 15 October 2018, enhancing the Bank’s scale and national footprint.
About Virgin Money
- Virgin Money is part of CYBG, Britain’s sixth biggest bank. CYBG acquired Virgin Money in October 2018.
- Virgin Money offers savings, mortgages, credit cards, current accounts, currency services, pensions, investments and protection products to customers across the UK.
- Virgin Money’s business ambition is to make “everyone better off” – this philosophy underpins its approach to business by offering good value to customers, treating employees well, making a positive contribution to society and delivering a profit to shareholders.
- More than 14,500 charities have registered with Virgin Money Giving and by the end of June 2018, over £660 million had been donated to charities through the service since its launch in 2009, resulting in an estimated £20.6 million more donated to charities because of its not-for-profit model.
This communication is available for distribution by the following Aberdeen Asset Management affiliates: Issued by Aberdeen Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority in the United Kingdom. Registered Office: 10 Queen’s Terrace, Aberdeen AB10 1YG. Registered in Scotland No. 108419.