REG - abrdn PLC - Sale of abrdn Capital

AberdeenAnnouncement

28/02/2023 07:16

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RNS Number : 2985R  abrdn PLC  28 February 2023

abrdn plc

Agreement to sell Discretionary Fund Management Business

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
billion(1) 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 term(2)
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).

 

 

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