March 20, 2018 / 9:28 AM / in 6 months

Virgin Money, Aberdeen Standard Investments form asset management JV

LONDON (Reuters) - Virgin Money (VM.L) and Aberdeen Standard Investments (ASI) (SLA.L) are forming a joint venture to provide asset management services to customers of the British challenger bank, the two firms said on Tuesday.

FILE PHOTO: Signage is see outside a branch of Virgin Money in Manchester, Britain September 21, 2017. Picture taken September 21, 2017. REUTERS/Phil Noble /File Photo

ASI, the asset management arm of Standard Life Aberdeen (SLA), will buy 50 percent of Virgin Money Unit Trust Managers for an upfront payment of 40 million pounds ($56.24 million), with the deal due to complete at the end of 2018, the firms said in a statement.

Virgin Money has 200,000 customers and 3.7 billion pounds in assets under management.

Jayne-Anne Ghadia, chief executive of Virgin Money, said the deal would “generate significant growth in assets under management, drive additional capital-light returns and...be game-changing for our investment business over the longer term.”

Insurers and asset managers are seeking distribution deals with banks to extend their customer base. Aviva (AV.L) agreed a 10-year general insurance distribution deal with HSBC (HSBA.L) last year.

Lloyds Banking Group (LLOY.L) pulled 109 billion pounds in investments from SLA last month.

($1 = 0.7113 pounds)

Reporting by Carolyn Cohn, editing by Sinead Cruise

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