LYG Lloyds Banking Group Plc

   By David Ricketts 
   Of Financial News 
 

Lloyds Banking Group PLC (LLOY.LN) has handed BlackRock, the world's largest asset manager, a slice of the 109 billion-pound ($144.1 billion) mandate it is in the process of pulling from Standard Life Aberdeen PLC (SLA.LN).

The U.K. banking group said Friday that U.S.-based BlackRock will manage GBP30 billion worth of index strategies on behalf of its Scottish Widows division. The transfer will happen once an ongoing legal dispute with Standard Life Aberdeen has completed, or when the existing contract expires in February 2019.

Aberdeen Asset Management had previously managed the entirety of the mandate for Scottish Widows, but Lloyds decided to pull the contract following the asset manager's merger with Standard Life in 2017.

Lloyds argued that the money couldn't be managed by a rival insurer and deemed Standard Life Aberdeen a competitor. In May, the Scottish investment group said it didn't agree with Lloyds's decision to terminate the contract and began a dispute resolution with the bank that is in process.

In addition to the Scottish Widows mandate, Lloyds said it is looking to form a strategic partnership with BlackRock "including collaboration in alternative asset classes, risk management and investment technology."

Antonio Lorenzo, chief executive of Scottish Widows and group director of insurance and wealth, said: "BlackRock has been selected following a competitive tender process in which it clearly demonstrated its global market leading capabilities and deep expertise in the U.K. market. The partnership will ensure that Scottish Widows and the group can deliver good investment outcomes for its customers over the coming years."

Schroders PLC (SDR.LN), the U.K.-listed asset manager, is the favorite to oversee the remainder of the Lloyds mandate.

The asset manager confirmed earlier this week that it has had talks with the bank about how the two parties can work together in wealth management. It is expected that Schroders will sell a stake of its Cazenove wealth business to Lloyds in return for managing the money.

Lloyds said it is in the process of finalizing agreements for the remaining assets.

Several other asset managers were initially in the frame to scoop up the Lloyds contract, including J.P. Morgan Asset Management and Goldman Sachs Asset Management.

However, BlackRock and Schroders emerged as the favorites after both J.P. Morgan and Goldman Sachs fell out of the running last month.

Website: www.efinancialnews.com

(END) Dow Jones Newswires

October 12, 2018 05:48 ET (09:48 GMT)

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