Abrdn agreed to sell £6bn DFM business to LGT Wealth

Abrdn has agreed to sell its discretionary fund management arm Abrdn Capital to LGT Wealth Management.

Subject to regulatory approval, the deal is anticipated to complete in the second half of 2023.

It involves the transfer of Abrdn Capital’s £6.1bn in assets under management and approximately 140 employees to the new owners.

Abrdn Capital, formerly known as Standard Life Wealth, operates as an investment management company offering wealth management and asset allocation.

Additionally, it provides financial planning, advice services, and investing techniques.

The agreed price for the sale is £140m, announced on 28 February, subject to activities in the period to completion.

Abrdn said its DFM business that will need longer term investment to scale, will be a strategic fit for LGT Wealth Management, which is part of the LGT Group owned by the Princely Family of Liechtenstein.

The LGT Wealth Management, a UK subsidiary, oversees £20.4bn assets under management as at 30 June 2022 and reported £42.2m in gross profit as at 31 December 2021.

The company that is being sold to LGT presently has 4,000 clients and generated about £40 million in revenue in 2022. Evercore performed as financial adviser to Abrdn in relation to the transaction.

Abrdn chief executive Stephen Bird said: “We are establishing one of the UK’s leading personal wealth businesses, and this deal represents an important step forward in our strategy to focus on our high-growth, platform-led, businesses.

“Our track record over the past two years shows that where we identify non-core capabilities, we will look to divest and redeploy capital in ways that better align with the interests of our investors, clients, and customers. The decision to sell our DFM business underlines our commitment to that principle.”

Abrdn CEO Personal Richard Wilson added: “DFM is a high quality, profitable business with a strong client focus and a brilliant team. However, in line with the way the market is moving, it needs greater scale and will be a better fit for LGT.

“Within Abrdn’s Personal vector, our strategy for growth is focused on integrating the services of ii with financial planning services for our customers.”

However, Abrdn has said its managed portfolio service business, which is currently part of the DFM business, will be carved out and retained prior to completion of the transaction. The wealth manager said it model portfolio services business is better aligned to its group strategy.

The MPS team will be relocate to sit within Abrdn’s Adviser vector to make the most of the opportunities available through that business distribution model.

Abrdn stated that its strategic aim is on its Personal vector which mainly focuses on integrating the high-tech, high-touch model of Interactive Investor with financial planning.

Abrdn purchased the subscription-based investment platform for £1.49bn in December 2021. The acquisition will enhance Abrdn’s presence and growth prospects within the fast-growing personal wealth market.

Abrdn CEO Adviser Noel Butwell said: The Adviser vector is a natural home for our MPS colleagues, and we look forward to welcoming them. We’ll continue to invest in our MPS solutions and build on the successes that the team has had to date.

The prospects for MPS solutions look positive with almost half of wealth managers expecting to use these solutions more extensively in the near term and we are confident that our skills, expertise and track record will deliver real results and help our UK adviser clients serve their customers better and grow their businesses.

“Our focus on serving advisers in the UK means we are committed to making it easier to work with us. Advisers will see a greater alignment of our technology and investment solutions to support them in meeting the needs of their clients.”

If you are looking to sell your business, find out more about the selling process and how Gunner & Co. can help you. Book a meeting with our MD Louise here

Gunner & Co. specialise in IFA sales, IFA business sales, retiring IFAs and IFA client bank sales.