Standard Life Aberdeen fights Scottish Widows over £109bn

Standard Life Aberdeen fights Scottish Widows over £109bn

Standard Life Aberdeen has formally challenged the right of Scottish Widows to pull £109bn of assets from the company.

As FTAdviser previously reported, Scottish Widows informed Aberdeen Standard Investments in February that it was withdrawing the assets.

Scottish Widows stated the reason for this was that when Aberdeen, which had originally managed the money, merged with Standard Life, it became a competitor to Scottish Widows, as Standard Life has an insurance business.

The notice period it gave was one year.

FTAdviser understands that BlackRock, Schroders and JP Morgan are the three firms shortlisted by Scottish Widows to manage some or all of the assets in future.

But in an announcement to the stock exchange this morning (8 May), Standard Life Aberdeen said it is challenging the right of Scottish Widows to terminate its investment management agreement, as it claimed investment arm Aberdeen Standard was not a material competitor and therefore Scottish Widows had no right to terminate the agreement.

At the time of the announcement, Standard Life Aberdeen played down the impact of the loss of the assets, saying it represented just 4.4 per cent of revenue.

In its statement to the stock exchange this morning (8 May) Aberdeen Standard said: "Standard Life Aberdeen has informed Lloyds Banking Group {parent company of Scottish Widows} that it does not agree that, following the merger of Aberdeen Asset Management PLC and Standard Life PLC, {it} was in material competition in the UK with Lloyds Banking Group and that, therefore, Standard Life Aberdeen does not consider that Lloyds, Scottish Widows or their respective affiliates has the right to terminate the investment management agreements.

"The parties are engaging with each other within the framework of the dispute resolution process envisaged in the investment management agreements."

Aberdeen Standard Investment declined to add further comment when approached by FTAdviser.

Mark Polson, principal of the Lang Cat, said if Standard Life Aberdeen can win back at least some of the assets it manages for Scottish Widows and continue to grow the assets of other parts of its business it will represent "a job well done."

Scottish Widows has been approached for comment.