Schroders confirms talks with Lloyds over wealth arm

Cazenove Capital stake could seal the deal for £109bn mandate


Schroders has issued a regulatory filing confirming it is in discussions with Lloyds regarding its wealth arm following speculation the retail bank may take a stake in Cazenove Capital.

In a stock exchange announcement on Monday morning, Schroders said: “Following recent media speculation, Schroders plc confirms that it is in discussions with Lloyds Banking Group plc with a view to working closely together in parts of the wealth sector.

“Discussions are ongoing and there can be no certainty that these discussions will lead to any formal arrangement being entered into. A further announcement will be made when appropriate.”

Lloyds is reportedly looking at taking a stake in Cazenove Capital, Schroders’ UK and Channel Islands wealth management business, as part of its search to find a new manager for a £109bn mandate it yanked from Standard Life Aberdeen earlier this year. Last week, Sky News reported the banking group would take a 19.9% stake in Cazenove Capital via a joint venture as part of any alliance with Schroders.

Blackrock still eyeing Lloyds mandate

Last week, the Financial Times reported Schroders was poised to take the entire mandate for itself despite previous reports the mandate would be split with Blackrock responsible for passive management.

However, Portfolio Adviser understands Blackrock remains in the running and Lloyds is still considering splitting the mandate between passive and active management.

Portfolio Adviser reached out to Blackrock but it declined to comment.

However, the deal, which was first heard of in July, saw Blackrock as a rumoured frontrunner as well and it is understood that the asset manager is still in the running.

Jason Hollands, managing director at Tilney, said Schroders were obligated to put out a stock exchange announcement because they are a listed company. “This announcement simply confirms they are in discussions that may or may not lead to a further announcement.”

Hollands said it is not clear whether Schroders have entered exclusive discussions regarding the £109bn mandate or whether other parties are still in the running.

Darius McDermott, managing director at Chelsea Financial Services, said the talks with Schroders looks to be going further than the pitch stage.

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