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What the Newton deal means for Standard Life Wealth

by Danielle Levy on Mar 11, 2013 at 14:18

What the Newton deal means for Standard Life Wealth

Standard Life Wealth (SLW) will maintain Newton’s long-only investment proposition alongside its volatility-managed target-return solution after the acquisition completes, with SLW chief executive Richard Charnock claiming ‘the important message is there is absolutely no change either side’.

Speaking to Wealth Manager in the wake of the announcement that Standard Life will acquire Newton’s private client division for no more than £83.5 million, Charnock said he sees attractions in both investment propositions, while management teams will spend the next seven months finalising details.

‘The approach Standard Life Wealth and Newton offers will remain. How we are positioning and messaging that is something we are working on,’ he explained.

Newton chief executive Helena Morrissey said she had opted to sell the private client division in order to streamline the business and focus on core activities in the retail, charity and institutional markets. She added that finding an investment-led house with access to a robust institutional process was a key consideration while looking for a potential acquirer.

‘Our focus on direct stocks is going to continue. This was a big part of the negotiations, as we have an investment-led offering and this is what Standard Life want to do as well,’ she said.

Charnock echoed her sentiments: ‘Another aspect of the organisation [Newton] that I really like is they are used to leveraging off a global asset management and institutional fund management business. We do exactly the same at Standard Life, as we are able to leverage off the capability and funds of Standard Life Investments.’

While Newton’s private client division currently has around £650 million invested in Newton’s fund range, Charnock said this was an area for review but the priority was to focus on a smooth transition.

‘This is all to be reviewed, but we are not creating any client detriment in this process. We are bringing the two businesses together later this year and everything we do with the management of Newton clients will be reviewed over a period of time, but nothing changes at this point,’ Charnock said.

Although SLW has experienced rapid growth since launch in 2008, amassing over £1 billion in assets, Charnock said the firm had been open to acquisition opportunities but had strict criteria, which Newton met. The deal will see SLW triple its assets post the deal, as Newton currently runs £3.6 billion.

‘Newton ticks all the boxes for us and was a clear opportunity as it is not encumbered by platforms and corporate entities. It has a strong client base and talented people looking after them,’ he said.

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1 comment so far. Why not have your say?

Scotty McJock

Mar 11, 2013 at 14:36

I may be wrong but did Newton not spend a lot of the last 2 years getting rid of any client with less than £1M? What will the new minimum be for SLW? Could they be welcoming the same clients back?

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