Insight sold to BNY Mellon
LLOYDS Banking Group has confirmed that it is to sell its Insight Investment unit to Bank of New York Mellon in a £235m cash-plus-shares deal.
The bank, which has been conducting a review of its asset management businesses with an eye to disposals, said it had reached an agreement in principle with BNY Mellon, ending months of speculation.
The transaction, scheduled for completion in the last quarter of the year, will see BNY Mellon pay £200m in cash and £35m worth of equity to acquire Insight’s external fund management operation, which manages around £80bn of assets.
Once the US bank has folded the unit into its own asset management operations, BNY Mellon will have more than $1 trillion (£605bn) under management, it said.
Ronald O’Hanley, president and chief executive officer of BNY Mellon Asset Management, said the acquisition would help the business expand Insight’s specialist area of liability driven investment, which he said was “a critical tool for meeting the needs of current and future retirees”.
Abdallah Nauphal, Insight’s chief executive officer, said the transaction would “realise Insight’s full potential”.
Lloyds will now embark on a restructuring of its remaining asset management operations, which it said would be integrated into its Scottish Widows Investment Partnership unit.
The transfer of assets not bought as part of the Insight deal will boost Scottish Widows Investment Partnership’s assets under management from £83bn to roughly £125bn.
The deal is the latest sign of consolidation in the industry, after Barclays sold its Barclays Global Investors unit to BlackRock last month in a cash-plus-shares deal worth $14.2bn.
JP MCGRATH
HEAD OF FIG TEAM CLOSE BROTHERS
US bank BNY Mellon hired Close Brothers to act as financial advisers on the purchase of Insight.
The Close Brothers team was led by John Paul McGrath, who heads Close Brothers’ financial institutions group (FIG).
McGrath joined the company from NM Rothschild, where he focused on financial services M&A, building up a wealth of experience, from acquisitions and disposals to capital raising and IPOs.
Deutsche Bank acted for Lloyds on the disposal, using a team of six from its FIG team, led by Tadgh Flood.
Flood advised Barclays on its abortive bid for ABN Amro and was also involved in the Irish banking bailout.
Lloyds took legal advice from Allen & Overy, whose team was led by corporate partner Alistair Asher and senior associate Duncan Bellamy, assisted by corporate associates Craig Harris and Edward Timmins.