Virgin Money buys out Abrdn stake in investments joint venture
Virgin Money is set to buy out its partner Abrdn’s stake in its investments business in an attempt to strike new growth.
Virgin Money buys out Abrdn from investments joint venture
The banking brand initially joined hands with the UK asset management firm Abrdn to start developing Virgin Money Investments in 2019 with an equal share. The venture’s debut offering included a stocks and shares ISA and non-ISA investment products and was launched for retail investors in the UK through a new digital platform in April last year. These products were later joined by pension accounts, developed in partnership with wealth management platform FNZ, in November.
Having achieved what it describes as “significant milestones” throughout the venture’s origin story, which included opening 150,000 customer accounts and securing c.£3.7 billion in total assets under management (AUM), as of 31 December 2023, the founding duo have now decided to, partly, part ways and focus on their respective strengths. Virgin Money claims this to be its “broad appeal and distribution”, while Abrdn will redirect its attention towards its supposed “strength in asset management”.
To enable the commencement of these objectives, the pair have agreed that Virgin Money will seize full control of the venture, with the aim to double its AUM by 2029. Although stepping away in part, Abrdn is expected to guide the venture with investment advice.
The cash transaction is totalled at £20 million and will see Virgin Money take control of the remaining 50% stake in the holding company, Virgin Money Unit Trust Managers Ltd, from Abrdn, in a move it expects to complete in April, subject to customary approvals.
Speaking on the deal, Allegra Patrizi, managing director of business and commercial at Virgin Money, explains that the deal will consolidate its current provision of deposits, mortgages, credit cards and daily banking with the investments and pensions business, enabling the brand to “help more customers feel confident to invest for the future and driving significant growth in assets under management”.
