Virgin Money has signed its joint venture agreement with Aberdeen Standard Investments, including the conditional sale of 50 per cent of its asset management business for at least £40m.
An initial agreement in principle for the partnership was first announced in March last year, but a sale and purchase agreement for the investment and pensions joint venture has now been signed with the transaction expected to complete in Q2 2019.
The agreement will see ASI purchase 50 per cent of Virgin Money Unit Trust Managers Limited for an upfront cash payment of £40m and is expected to offer Virgin Money customers access to a broader range of funds and solutions at a "competitive cost".
Following the acquisition of Virgin Money by CYBG in October last year, the joint venture is expected to offer additional investment solutions to CYBG’s six million customers in due course.
David Duffy, chief executive of CYBG, said: "We are delighted to take the next step forward in our partnership between Virgin Money and Aberdeen Standard Investments, enabling us to provide innovative and attractive investment solutions through our national distribution.
"Using our brand and customer reach, combined with ASI’s clear asset management strengths we will be able to provide a truly compelling investment and pensions proposition to our retail customers."
Martin Gilbert, co-chief executive at Aberdeen Standard Investments, said: "The signing of the SPA that encompasses Virgin Money, Clydesdale Bank and Yorkshire Bank customers is an important milestone in progressing our joint venture with Virgin Money.
"The partnership offers a fantastic opportunity to develop a business that combines the best talents of Virgin Money and ASI.
"Most importantly, the joint venture will offer customers across the enlarged CYBG group, beyond Virgin Money’s existing customer base with investment solutions to help them achieve their long-term financial goals."
When the joint venture was initially announced last year it was met by mixed responses, with some branding it the result of increased regulatory pressure on the asset management industry.