Lloyds lines up £820m asset manager sale

Michael Bow
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SCOTTISH Widows Investment Partnership (Swip), the fund management arm of Lloyds Banking Group, has been put on the block by Lloyds in a move designed to bolster the bank’s capital base.

Swip, which manages £142bn in pension scheme and savings assets, could net the bank about £820m if a buyer is found, adding an extra 0.2 per cent to Lloyds’ 12 per cent core tier 1 capital cushion.

Deutsche Bank has been appointed to advise on the sale.

“We believe a trade sale would be more likely than an IPO (initial public offering), appealing to an acquirer with large indexed funds,” Numis analyst Mike Trippitt said in response to the news.

It is understood US-listed financial giant Ameriprise Financial, which also owns UK active fund manager Threadneedle Investments, is in line to bid for the firm.

Other large passive managers, such as BlackRock and Legal and General Investment Management, have also been tipped as possible buyers of Swip given the similar kinds of business they run.

Assets managers outperformed the FTSE All Share by 22 per cent last year, and with equities markets rising to record highs, income from booming assets under management fees could lure other buyers of the woodwork.

Swip declined to comment.