abrdn takes 60% haircut on Virgin Money stake as bank assumes full ownership of investment venture

investmentweek.co.uk:

Then-ASI purchased a 50% stake in the joint venture for £40m plus capital adjustments of £10m, for a total sum of £50m, which has been purchased by Virgin Money for £20m, a 60% discount on the original purchase price.

Revealed in 2018, established in 2019 and launched to retail investors in 2023, Virgin Money Investments aimed to bring asset management services to Virgin Money customers, with then Aberdeen Standard Investments offering «fund management services and access to its state-of-the-art digital technology».

At the time, former ASI co-CEO Martin Gilbert said the firm looked forward to «sharing a strong and profitable relationship over many years to come».

Known as Virgin Money Unit Trust Managers, ASI purchased a 50% stake in the firm for £40m plus capital adjustments of £10m, for a total sum of £50m.

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Today (14 February), Virgin Money purchased now-abrdn's 50% stake for a cash payment of £20m, representing a 60% haircut on the original purchase price.

The acquisition has been funded entirely from Virgin Money's existing capital resources, with the transaction expected to consume around 5 basis points of the bank's Common Equity Tier 1 capital on the anticipated April completion date.

In the four years since the joint venture was established, Virgin Money Investments launched a digital platform and a range of investment products to retail clients in April 2023, with a pension added in November 2023.

The proposal includes the renewal of the investment management agreement between abrdn and Virgin Money, meaning the manager will continue to provide investment advice for Virgin Money Investments.

All employees of the joint venture will be