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Standard Life Investments seals Ignis buy in £390 million deal

Standard Life Investments seals Ignis buy in £390 million deal

Standard Life Investments (SLI) has agreed to buy Ignis Asset Management for £390 million.

The Edinburgh-based fund manager said Ignis would complement its strong organic growth and 'reinforce its foundation' for building a business in the rapidly developing liability aware market.

The combined business will offer a full range of investment solutions, including active management for institutional and wholesale clients, discretionary wealth management for high net worth private clients and outcome orientated products for maturing pension schemes and insurance companies.

As part of the transaction - which is expected to be completed by the end of June - SLI will enter into a strategic alliance with previous Ignis owner Phoenix through which it will provide asset management services to Phoenix’s life company subsidiaries, including the potential to manage future books of assets that Phoenix may acquire.

SLI also highlighted the capture of the Ignis Absolute Return Government Bond fund, which complements its existing suite of absolute return funds including Global Absolute Return Strategies, Global Focused Strategies and Absolute Return Global Bond Strategies.

Commenting on the transaction, Keith Skeoch (pictured), chief executive of SLI, said: 'This acquisition is entirely complementary, deepening our investment capabilities, broadening our third party client base and strengthening our strategic position from which to develop a business in the rapidly developing liability aware market. Standard Life Investments continues to perform very strongly.

'Continuity of investment performance and commitment to client service and relationship management remain our key priorities, with migration and integration of Ignis taking place in a controlled manner under unified management from day one.'

Standard Lifechief executive David Nish added: 'Our group strategy is built on a strong understanding of our markets and customers. We will continue to lead market thinking and identify opportunities as the landscape changes to move our business forward and drive value for shareholders.

'The acquisition of Ignis continues the delivery of our group strategy to grow assets under management through enhancing our investment capabilities and expanding our offering to meet the changing needs of our customers. It will deliver enhanced earnings and cash generation and support future growth in revenues.'

The Ignis boom

Ignis' business has been booming recently thanks in part to the popularity of its Absolute Return Government Bond and Property funds.

In a separate results announcement, the firm said it had attracted a record £1.9 billion in net inflows in 2013, exceeding the £1.6 billion achieved in 2012, while combined UK wholesale and European net sales, excluding liquidity, increased more than threefold year-on-year.   

The firm's liquidity products attracted an additional £420 million of net inflows in 2013.

According to the group, 85% of assets outperformed their respective benchmarks and peer groups in 2013 compared to 79% in 2012 and 73% in 2011.

As at the end of 2013, the firm managed £59 billion in assets and earned revenues of £150 million, generating Ebitda of £52 million.

In a statement, Ignis chief executive Chris Samuel said: 'I am pleased to report a strong set of financial results for the full year 2013. During the year the business made significant progress against its stated objectives in particular through the delivery of robust investment performance.'

He added: 'I have been delighted with the progress that the business has made since 2009. We have invested in talent and refocused the business which has resulted in improved investment performance, net sales and profitability.

'Ignis is now ready to move on to the next phase of its development by way of a combination with Standard Life Investments. Standard Life Investments will inherit a strong range of products and investment capabilities and a group of talented individuals who will be an asset to the merged business. I am delighted that the business is being handed over in such excellent shape.'

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