Schroders Plc and Lloyds Banking Group has confirmed the discussions of a wealth management merge, with reports citing that the deal would see Lloyds owning 50.1% of the joint venture and Schroders owning the remainder. Although not directly involved in this new joint venture, Lloyds would also be taking a 19.9% stake in Cazenove Capital, a wealth manager division of Schroders.
Following the news, the investors’ reactions saw Schroders’ share price falling more than 3%; one analyst stated that investors in the UK-listed fund manager would be cautious on the arrangements until the full details of the agreement emerged.
£273.3m of Schroder’s net income in 2017 was due to wealth management and has been an area of focus for future growth since.
The deal would see Schroders likely to take on a £109bn investment management contract from Scottish Widows, owned by Lloyds, following a disagreement after the merger of Standard Life and Aberdeen Asset Management; an analyst added that BlackRock could also be awarded part of that mandate.
Lloyds were looking to announce the winner of the mandate by August, but due to the dispute with Standard Life Aberdeen where the company were disputing being dropped by Lloyds, the mandate has gone to arbitration.
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