Why Nigel Thomas would increase St James’s Place stake on Lloyds sale

AXA Investment Managers' star manager Nigel Thomas said he would consider increasing his stake in St James's Place (SJP) if Lloyds sold its 60% interest in the wealth manager.

Citywire AAA-rated Thomas (pictured) made his comments to Wealth Manager amid fresh reports the part state-owned lender was looking for a buyer for the stake, valued at around £1 billion, to keep regulators of its back and pave the way for it to pay its first dividend in five years.

Thomas owns 7.5 million shares in SJP accounting for 0.89% of his Citywire Selection AXA Framlington UK Select Opportunities fund.

‘If SJP is spun off we would increase our allocation to the stock as long as the price is right. I bought SJP post-credit crunch, around two years ago, on the basis I would be able to increase my position if Lloyds were to sell the holding,’ Thomas said. 

He added: ‘Post-RDR the SJP business model looks robust. The partners have equity, meaning their interest is very aligned to the performance of the PLC. Cashflow is strong and I believe the overhang from the uncertainty surrounding Lloyds has held back the stock.’

The power of the SJP business model was demonstrated on 31 October when third quarter numbers showed assets under management were moving towards £33 billion.

Investec Securities applauded the figures, repeating a buy rating and describing the firm as a ‘rarity in the UK life industry in that it is a growth company’.

However, not all appear to be as enamoured with the firm. BlackRock Investment Management disclosed a 0.25% short on SJP on the back last week’s trading update.

Over three years to the end of August, Thomas has returned 47.3% versus the FTSE 100 Total Return's 24.39%.