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Agreement to sell Discretionary Fund Management Business

28 February 2023

abrdn plc (“abrdn”) is today announcing that it has entered into an agreement to sell abrdn Capital, its discretionary fund management (“DFM”) business, to LGT.

The sale is expected to complete in the second half of 2023, following satisfaction of certain conditions including receipt of customary regulatory approvals.  The sale involves the transfer of approximately GBP 6.1 billion1 in assets under management and approximately 140 employees. The agreed purchase price to be paid at completion is £140m, subject to certain adjustments, principally reflecting activity in the period to completion.

In order to succeed in the longer term in the DFM market, abrdn’s view is that this part of the business would need to build much greater scale. With abrdn’s strategy for its Personal vector focused on integrating the high-tech, high-touch model of interactive investor (“ii”) with financial planning, abrdn has concluded that another owner would be better placed to invest to deliver greater scale in the DFM business.

abrdn’s Managed Portfolio Service (“MPS”) business, which is currently part of the DFM business, is better aligned to its group strategy and will be carved out and retained prior to completion of the transaction. abrdn views MPS as an important growth channel that aligns well to the way that the UK personal investment market is developing. The MPS team will be moved to sit within abrdn’s Adviser vector in order to maximise opportunities available through that business’ distribution model.

Stephen Bird, abrdn CEO, said;

“We are establishing one of the UK’s leading personal wealth businesses, and this deal represents an important step forward in our strategy to focus on our high-growth, platform-led, businesses.

Our track record over the past two years shows that where we identify non-core capabilities, we will look to divest and redeploy capital in ways that better align with the interests of our investors, clients and customers.

The decision to sell our DFM business underlines our commitment to that principle.”

Richard Wilson, CEO Personal, added;

“DFM is a high quality, profitable business with a strong client focus and a brilliant team. However, in line with the way the market is moving, it needs greater scale and will be a better fit for LGT.

Within abrdn’s Personal vector, our strategy for growth is focused on integrating the services of ii with financial planning services for our customers.”

Noel Butwell, CEO Adviser, said;

“The Adviser vector is a natural home for our MPS colleagues, and we look forward to welcoming them. We’ll continue to invest in our MPS solutions and build on the successes that the team has had to date.

The prospects for MPS solutions look positive with almost half of wealth managers expecting to use these solutions more extensively in the near term2 and we are confident that our skills, expertise and track record will deliver real results and help our UK adviser clients serve their customers better and grow their businesses.

Our focus on serving advisers in the UK means we are committed to making it easier to work with us. Advisers will see a greater alignment of our technology and investment solutions to support them in meeting the needs of their clients.”

The business being sold to LGT delivered c.£40m in revenue in 2022, and currently serves around 4,000 clients. Evercore acted as financial adviser to abrdn in relation to the transaction.

28 February 2023

 

Enquiries:

 

Media

Rachel Cashmore

 

+44 (0) 7341 703 358

Institutional Equity Investors

Catherine Nash

 

+44 (0) 7798 518 657

Group Secretariat

Paul McKenna

 

+44 (0) 7736 853 801

 

LEI: OTMBS544NMO7GLCE7H90

 

Notes to editors

 

1

As at 31 December 2022.

2

Survey by Cerulli in June 2022 - almost half (46%) of UK wealth managers expect to use model portfolios more extensively over the next 12 to 24 months.

  

About abrdn

At abrdn, we enable our clients to plan, save and invest for their futures.

We have structured our business into three areas – and together they reflect our focus on enabling our clients to be better investors:

  • Investments: We work with clients to create solutions across asset classes, regions and markets globally – combining multi-layered research and market insights with technology and diverse thinking.
  • Adviser: We offer market-leading platform technology and tools that enable UK wealth managers and financial advisers to create more opportunity for their business and their clients.
  • Personal: We help people throughout the UK plan for their financial futures – through our financial planning business and our digital investing services.

Across our investments, adviser and personal businesses we manage and administer £500 billion of assets for our clients, and abrdn plc has c.1 million shareholders. (Figures as at 31 December 2022).