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 Virgin 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 Executive 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.
Notes to editors
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.