Abrdn in talks to buy Interactive Investor in £1.5bn deal

Abrdn in talks to buy Interactive Investor in £1.5bn deal

Asset manager Abrdn is in talks to buy DIY investment platform Interactive Investor in a deal estimated to be worth £1.5bn. 

In a statement to the stock exchange this morning (November 8), the asset manager confirmed it is in discussions with J.C. Flowers & Co, the private equity firm that holds a majority stake in Interactive Investor, about a potential takeover. 

The deal could be announced in the next few weeks, according to FTAdviser’s sister title the Financial Times.

Abrdn added there was no certainty the discussions will result in a transaction, and a further announcement will be made by the company “as and when appropriate”.

The acquisition would give Abrdn access to Interactive Investors’ 450,000 clients, on behalf of whom the firm manages around £56bn, according to Boring Money.

Interactive Investor is the second largest DIY investment platform after Hargreaves Landsdown.

DIY investing has boomed during the pandemic, with the number of customer accounts on these platforms increasing by 47 per cent since March 2020, according to Boring Money.

This included a rise in customer accounts of 10 per cent in the first quarter this year, the fastest rate of quarterly growth since Boring Money started tracking the figures in 2015.

The deal comes after a period of change for Abrdn, formerly Standard Life Aberdeen, which re-branded in April this year after it sold the Standard Life brand to Phoenix Group.

The group had struggled since the merger of Aberdeen Asset Management and Standard Life in 2017, with joint chief executives Martin Gilbert and Keith Skeoch both departing the business in the following years.

The firm's 2020 accounts showed net outflows of £29bn, with adjusted pre-tax profits down 17 per cent to £487m.

Chief executive Stephen Bird, who took over in September last year, made changes to the firm’s management team during the summer as he prepared for the departure of the firm’s chief investment officer, Rod Paris, who leaves the firm at the end of this year.

Bird has previously hinted he wants to grow the firm through acquisitions, and at June 30 the firm had £2.8bn in regulatory capital, according to its results. 

In August, the firm bought AI-driven business Exo Investing in order to launch a 24/7 digital wealth management solution.

Then last month, Abrdn acquired investment platform Finimize.

Commenting on Abrdn’s reported plans to acquire II, Holly Mackay, chief executive of Boring Money, said the DIY investment market has been going “gangbusters” since the pandemic.

She said: “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.”