LV=’s own press release is ambiguous on the subject, stating the talks are about: “outsourcing the management of the Society’s assets and Threadneedle taking over its existing external funds.”
This makes it unclear if the funds are viewed as a separate deal or if they too will be merely a part of an outsourced arrangement. If LV= remains the Authorised Corporate Director (ACD) for the 22 portfolios, then it is likely many of the existing managers on the external funds would be out of a job. However, if Threadneedle buys the vehicles and becomes the ACD, there is scope for some managers to move with the portfolios. With Threadneedle as the ACD, many of the portfolios could also be merged into its own range. Under an outsourced management contract LV= would retain distribution, brand as well as the funds’ fees with a corporate sharing agreement between the two with regards to generated revenue.
While there are obvious cross overs in manager expertise between the two groups, one expected move is for multi-managers Paul Kim and Richard Timberlake to potentially go across to Threadneedle. Not too long ago Threadneedle was said to be looking at hiring Insight’s former fund of funds team, which subsequently fell through.
According to LV=, as the talks have just begun it is too early to define, confirm or deny if they will involve a sale of the external funds or simply be a part of a wider outsourced management contract.
The discussions are to take place over the next few weeks with the aim of reaching a final decision on the proposal at the start of next month.
