Under the terms of the agreement, ASI is expected to acquire 50% of Virgin Money’s unit trust business for an upfront cash payment in excess of £40m.
It will also run Virgin Money’s £3.7bn assets under management (AUM).
Martin Gilbert (pictured), co-chief executive at ASI said Virgin Money’s customer focus mirrors that of ASI. “We look forward to working together and sharing a strong and profitable relationship over many years to come,” Gilbert said.
The firms said the proposed partnership will combine ASI’s strength in asset management with Virgin Money’s brand and retail distribution expertise.
The groups said the move will leverage the strength of both brands to increase AUM over time.
With 200,000 retail investment customers, the venture will allow Virgin Money to focus on its retail investment proposition. It will also provide Virgin Money’s customers with access to a broader range of funds and solutions at a competitive cost.
Jayne-Anne Gadhia, chief executive at Virgin Money, said: “We look forward to using our brand and customer reach, combined with ASI’s strength in asset management and its digital capability, to provide a market-leading customer proposition.
“This mutually beneficial relationship will give our customers a broader fund choice and the tools and capability to invest for the future with confidence.
“As a result, it offers a compelling proposition for our customers and offers excellent value for our shareholders. It is expected to generate significant growth in assets under management, drive additional capital-light returns and to be game-changing for our investment business over the longer term.”
While the deal is still subject to further mutual due diligence, regulatory and other approvals, the transaction is expected to be completed by the end of 2018.
