BlackRock has won a bidding war to manage £30bn of Scottish Widows’ index strategies after parent company Lloyds terminated a major contract with Standard Life Aberdeen to run the money.
Aberdeen Asset Management had managed nearly £110bn in Scottish Widows Investment Partnership funds prior to its merger with Standard Life.
However, Lloyds said it thought the merger brought Aberdeen into competition with Scottish Widows, so cut the combined firm off the mandate.
The companies have been in arbitration proceedings since, with Standard Life Aberdeen contesting the legality of the decision, arguing that since it sold its own life arm to Phoenix, it could not be in competition with Scottish Widows.
After a lengthy tender process, BlackRock has now been chosen to run £30bn of the funds. It will also enter a “strategic partnership” with Scottish Widows where the companies will work together on “alternative asset classes, risk management and investment technology”.
What happens to the remaining £80bn of funds is also close to being finalised, Scottish Widows says.
Scottish Widows chief executive Antonio Lorenzo says: “BlackRock has been selected following a competitive tender process in which it clearly demonstrated its global market leading capabilities and deep expertise in the UK market. The partnership will ensure that Scottish Widows and the group can deliver good investment outcomes for its customers over the coming years.”