Standard Life Investments is leaving the money markets sector due to expected increases in regulatory and capital requirements.
It says the decision could see around £3.5bn of funds transfer to similar funds managed by Deutsche Bank Asset Management. A spokesman says: “The regulatory and capital burdens upon money market funds that are run on a constant net asset value basis are expected to rise substantially in the future. As a result, Standard Life Investments has decided to exit this sector.”
Last year, Money Marketing revealed concerns that money market managers could be forced to inject increased risk into the products under the Investment Management Association’s plans to adopt a European definition for the sector.
The move was revealed last week as Standard Life issued its interim management statement which showed an £800m fall in sales for SLI from £2bn to £1.2bn for the first quarter of this year.
The company overall saw strong UK corporate pension and wrap sales increasing the firm’s long-term savings new business sales from £4.6bn to £5.8bn.
UK corporate pension inflows rose by 85 per cent to £559m from £302m in the final quarter last year. Total UK individual Sipp business inflows fell from £566m to £553m. Wrap assets under administration rose by 13 per cent to £7.5bn, with the number of IFA firms using the wrap rising from 820 to 874.
Chief executive David Nish says: “We have made a good start to 2011. Strong sales across our long-term savings business are evidence that our products and platforms are performing well.”