Abrdn has confirmed it wants to scupper Interactive Investor’s planned IPO and take over the UK’s only major fixed-fee D2C platform.
Sky News reported over the weekend that the £530bn asset manager is in “exclusive negotiations” to buy II for £1.5bn. In a regulatory announcement on Monday morning, Abrdn confirmed it is in discussions with JC Flowers & Co – the retail investment platform’s largest shareholder.
“There can be no certainty that these discussions will result in a transaction and a further announcement by the company will be made as and when appropriate,” the RNS said.
But Sky News reports Abrdn hopes to strike a formal takeover deal within the next fortnight.
‘Any future changes to Interactive’s pricing model would be a blow’
Boring Money chief executive Holly MacKay said the acquisition could be important for fee disruption and innovation.
“Over the last few years Interactive Investor has been steadily acquiring all the fixed-fee platforms in the UK market, making it the only major player with this model. Fixed-fee advocates have run out of choices for any other major established platform supporting well-diversified assets and investments and pensions,” MacKay said.
“Any future changes to Interactive’s pricing model would be a blow.”
II’s fixed fee model targets an affluent customer base with the average account size being around £100,000, according to Boring Money figures. It has an estimated £56bn assets under administration, making it the second-largest DIY investing platform with an estimated 15.5% of the market. That compares to market leader Hargreaves Lansdown, which has captured 38% of the market, according to Boring Money’s latest figures.
II would have joined competitors Hargreaves Lansdown and AJ Bell if it had moved forward with its plans for an IPO in 2022.
II deal would fit with Abrdn’s recent Finimize purchase
Since taking the reins of what was then called Standard Life Aberdeen in July 2020, chief executive Stephen Bird has been focusing on diversifying its revenue base across three areas: investment, adviser and personal.
In October, it acquired Finimize, which provides news and investment tips for retail investors. Finimize chief executive Max Rofagha will join Abrdn’s leadership to drive content and customer-driven technology capabilities across the group.
II would add transaction capabilities to this audience, said Mackay. “Content plus transactional capability is not a new story – AJ Bell acquired Shares magazine back in 2012. I suspect we’ll see a returned focus to DIY investing from the Big Boys – but after a decade of technological transformation and focus, they know they need content and customers as well as transactions and tech. It should be an interesting few years ahead.”
II chief executive Richard Wilson (pictured) would be expected to remain in place after the Abrdn deal, said Sky News.
Since Bird’s appointment as chief executive, Abrdn has also jettisoned Parmenion and acquired AI wealth management platform Exo Investing.
There has also been a shake-up of the senior leadership team with CIO Rod Paris set to retire at the end of the year, while former Brooks Macdonald boss Caroline Connellan has been appointed to lead the asset manager’s personal wealth arm.
The most controversial move, though, has been the rebrand of Standard Life Aberdeen to become Abrdn, which was described as one of the “most poorly conceived” rebranding exercises when it was unveiled in April.
