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Collapse of Standard Widows deal sunk £109bn pension mandate

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Collapse of Standard Widows deal sunk £109bn pension mandate

Scottish Widows' decision to drop Standard Life Aberdeen from a fund management mandate worth £109 billion came after talks of a £6 billion deal between the two companies fell apart last week.

Standard Life Aberdeen has been running around £109 billion of Scottish Widows clients' pension investments since the merger of Standard Life and Aberdeen last year. The mandate was originally Aberdeen’s but the merger brought in Scottish Widow’s rival Standard Life.

Widows initially agreed to wait six months following the completion of the merger before a decision was made. That six month period ended last week, and Scottish Widows confirmed it would seek a new asset management partner

According to reports in the Sunday Times, a deal between Lloyds and Standard Life Aberdeen to run the business jointly had been on the table. It claimed Standard Life Aberdeen had put forward a joint venture proposition which would be run by a stand alone company and with a shared board. However, the paper reported that Lloyds, lead by chief executive Antonio Horta-Osorio  (pictured), wanted full control and for the ‘Standard Widows’ business to become one of its own subsidiaries.

The Sunday Times had also previously reported that a deal with Scottish Widows had always formed part of the plan when the merger between Aberdeen and Standard Life was conceived.

In 2013 Aberdeen bought Scottish Widows Investment Partnership from Lloyds in a cash and shares deal that cost Aberdeen £550 million.

Swip was renamed Aberdeen Asset Investments Limited. At the time the deal £136 billion in assets under management to Aberdeen’s operations.

Last year Lloyds agreed to delay making a decision in relation to the exercise of such termination rights or withdrawals until six months from the date of completion of the merger.

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