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Pearl Jam

A week has passed since the proposed merger of Resolution and Friends Provident was announced and still there seems to be more questions than answers over the future of both asset management arms.

F&C has been quick out of the blocks in bullishly claiming it is heading the merger of the two asset managers, while also stating that it is likely to keep in place the boutique policy launched by Resolution director Jonathan Polin.

When the deal was announced a week ago most industry commentators were quick to state that it was a deal for the life side, but it has been the investment angle that has brought much of the media attention, with the mass concensus being that overlaps will lead to casualties.

F&C has also stated that the merger would lead to some £26m of cost synergies that will ultimately lead to some redundancies.

Both group’s have fairly strong offerings in the market, with Resolution being-noted as something of a turnaround story under the guidance of chief executive Gavin Stewart and Polin.

The reason for the extra attention on the investment side is two-fold. First of all, there is notable overlap on both ranges, particularly on the UK and property, where both have heavyweight funds. The second – and perhaps the more interesting repercussion – is whether the managers of Resolution boutique offerings at Argonaut, Cartesian, Hexam and the as-yet unnamed fourth multi-manager boutique will want any part of F&C.

Hargreaves Lansdown head of research Ben Yearsley says: “I’d be extremely surprised if those joint-ventures stayed if the businesses were merged as the ethos for them may change.”

Yearsley points to the role of Stewart and Polin as integral to the boutiques future. He says: “If they go why would the boutiques stay? I wouldn’t be surprised if Pearl or another firm stops the merger coming to fruition in any case.”

Much has already been written on Hugh Osmond’s plans to put a spoke in the works of the merger, following the acquisition of 16 per cent of Resolution’s shares and claiming that they do not represent good value, while others could be waiting in the wings to launch their own bids for the firm.

The more time that passes the more difficult it seems for an agreement to become reality, as walls continue to be built in front of the two firms. Resolution appears to have other “more fancied” suitors lurking in the shadows and it seems only a matter of time before another name enters the fray.


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