April 24, 2024
Investments

Virgin Money agrees to buy out abrdn and take full ownership of investments joint venture to accelerate future growth


Virgin Money is to purchase abrdn’s 50 per cent stake in their joint venture, Virgin Money Investments, following the successful launches of its new investment and pension services for customers.

The joint venture between Virgin Money and abrdn was established in 2019, combining their specialisms to develop a new proposition for retail investors. That service, comprising both a new digital platform and a range of investment products, launched to customers in April 2023. A new pension was launched on the platform in November 2023, and all existing investment and pension accounts held on the old platform were successfully migrated to the new platform in January 2024.

Following the achievement of these significant milestones, Virgin Money will now take full ownership of Virgin Money Investments, representing a step forward in Virgin Money’s strategy to pursue profitable growth. The purchase will enable Virgin Money and abrdn to focus on their respective strengths; Virgin Money’s broad appeal and distribution, using brilliant digital propositions and compelling rewards for customers, and abrdn’s strength in asset management. Following the transaction, abrdn will continue to provide the investment advice for Virgin Money Investments.

Virgin Money Investments had total assets under management of c.£3.7bn and over 150k customer accounts at 31 December 2023. Virgin Money’s ambition is to double assets under management for Virgin Money Investments within the next five years.

Under the terms of the deal agreed, which is subject to customary approvals, Virgin Money will acquire the 50 per cent of Virgin Money Unit Trust Managers Limited1 currently owned by abrdn, for a cash payment of £20 million, funded entirely from Virgin Money’s existing capital resources. The transaction is expected to consume c.5bps of Common Equity Tier 1 capital on day one at completion, which is anticipated to be during April.

Allegra Patrizi, Managing Director Business and Commercial at Virgin Money said: “Our joint venture with abrdn has successfully delivered a new investment service offering simple and straightforward investment options for customers. Taking full control of Virgin Money Investments will mean we can bring the investments and pensions business together with our deposits, mortgages, credit cards and daily banking, enabling us to help more customers feel confident to invest for the future and driving significant growth in assets under management.”

The proposal is for all existing colleagues in Virgin Money Investments to move into Virgin Money, with no anticipated job losses.



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