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ABI investment arm merger with IMA to create new body

The Association of British Insurers’ investment affairs division is to merge with the Investment Management Association. 

Discussions between the trade bodies are ongoing although the move has been agreed in principle by both boards. The merger, which could happen as early as June, will see a new organisation created with a new name and new chairman.

Current IMA chair Douglas Ferrans is to step down later this year.

The move will also include the Institutional Voting Information Service joining the IMA.

The new organisation will be based in the IMA’s offices in London.

There are no planned job losses as part of the merger. 

ABI director of investment affairs Robert Hingley will move over to the new organisation to support the transition in a consultancy role before his departure. 

IMA chief executive Daniel  Godfrey is expected to head the trade body. He says: “This is an important strategic step for the IMA and our members. We will now be able to provide a united and coherent voice across the entire range of issues and activities that concern investment management – to the benefit of clients and ultimate beneficiaries.   

“It will help us meet one of our key objectives by increasing our clout and credibility in developing a culture of longer-term thinking. It will enable us to provide stronger and seamless support to the nascent Investor Forum.”

The Investor Forum was set up in December to use institutional investors and fund managers’ collective influence to improve corporate governance at UK listed firms. 

Cicero Group director and chief corporate counsel Iain Anderson says: “This move makes a lot of sense in terms of the shareholder voice being more cohesive. There is a big job to do in advance of the next election – the issue of active and engaged investors is going to be a big theme in the manifestos.”

The case for cost-cutting

ABI offices 700 x 450.jpg
ABI offices at Gresham Street

Combining the resources of the Association of British Insurers’ investment affairs division with the Investment Management Association seems to make sense from a costs perspective. 

This is against a backdrop of a torrid time for insurers, having to deal with the radicalBudget reforms, the charge cap and the FCA’s upcoming closed book review. 

The ABI is also hamstrung by £4.5m a year in rent costs for its City offices on Gresham Street, as Money Marketing reported in December. The ABI agreed a fixed 25-year lease agreement in 1989, the market peak for City rents, to let its Gresham Street offices until 24 March 2016. The trade body is expected to either renegotiate a lower rent ahead of the lease coming to an end, or move premises.

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