Fund buyers say the reported sale of the Standard Life brand to Phoenix Group is further evidence of the former’s newly minted chief executive Stephen Bird carving out a clearer identity for the firm, but they view underlying product quality as more important than a name.
It comes after the future of the Aberdeen Standard Investments name established by the £13bn merger of Standard Life and Aberdeen Asset Management in 2017 was called into question by a proposed deal with Phoenix Group, the life insurer.
According to Sky News, Bird (pictured), who joined Standard Life Aberdeen as chief executive last year, will agree to sell the Standard Life name to Phoenix Group, for an undisclosed amount, as the fund manager looks to streamline its brands.
The talks, using the codename Project Hulkum, would extend the terms of an asset management partnership reached in 2018. The partnership saw SLA, under former CEO’s Martin Gilbert and Keith Skeoch, part ways with its insurance arm for £3bn. The fund management group also extended its management of £48bn of assets for Phoenix and took a 19.9% shareholding in the insurer.
AJ Bell head of active portfolios Ryan Hughes said: “It seems clear that Stephen Bird in his new position as CEO of Aberdeen Standard Investments is looking to make his mark on the firm. When the merger of Aberdeen and Standard happened in 2017 it was unthinkable that either brand would be sold but as time moves on, it looks as if the business wants to have a clearer identity that consigns some of its history to the archives.”
SLA’s market value has shrunk from £13.3bn in October 2017 to £6.92bn after the Standard Life and Aberdeen Asset Management merger which saw investor withdrawals and net outflows of £58.4bn in 2019.
Bird has made significant changes within the company, promoting Chris Demetriou and Rene Buehlmann to chief executive officers of Americas and Asia respectively. He is also expanding into the Asian market. Heng An Standard Life, created in partnership with Tianjin TEDA International, was granted approval to launch investment products in China at the beginning of this year.
Hughes added: “Given the history and heritage of the Standard Life brand, I’m sure Phoenix would see value in it, not least as their own brand has little resonance with UK consumers. Where this leaves the brand of ASI is another question but given the strength of the Aberdeen brand in Asia, I’m sure that the business would want to capitalise on it and not start afresh with a new name that has no history or recognition.”
Fairview Investing director Ben Yearsley said: “I don’t think it’s a particularly big deal. The name on the tin is irrelevant; it’s the quality of the underlying product I’m interested in.”
An official announcement is expected in the next few days. Both Standard Life Aberdeen and Phoenix Group declined to comment.
