Lloyds-HBOS would be UK's top active fund manager

By Laurence Fletcher

LONDON (Reuters) - Lloyds TSB's $22 billion (12 billion pound) takeover of HBOS will create the UK's biggest active asset manager, with over 200 billion pounds in assets.

The deal will combine Lloyds' Scottish Widows Investment Partnership (SWIP), which ran 98 billion pounds in the UK at end-2007, according to the Investment Management Association, and HBOS's Insight Investment, which ran 109 billion pounds.

The new group's assets would place it behind only Legal & General Investment Management and Barclays Global Investors, which are not principally active managers but are mostly index-tracking firms, in the 3.4 trillion-pound UK asset management industry, based on December data.

Meanwhile, the combined branch network of HBOS and Lloyds TSB would give the asset management business huge potential to sell products to retail clients.

Based on data from Lipper Feri, a Thomson Reuters company, Halifax and SWIP together would have had around 730 million pounds of sales to retail investors in the second quarter, placing them just behind Invesco Perpetual, with 814 million pounds, and BlackRock, with 879 million pounds.

However, there is likely to be significant overlap in areas such as UK equities, fixed income and multi-manager business, where both firms have a presence.

Both Lloyds and Insight declined to give further details.

HBOS beefed up its newly branded Insight arm by buying blue-blooded investment bank NM Rothschild's asset management arm for a cut-price 61 million pounds in 2002 during the depths of the last bear market.