Schroders and Lloyds in wealth management talks

8th Oct 2018 07:30

(Sharecast News) - Schroders said on Monday that is in discussions with Lloyds Banking Group about working together "in parts of the wealth sector", rumoured to include a new joint venture.Last week there was speculation that the fund manager was poised to win the £109bn mandate to manage Lloyds' Scottish Widows investment assets.Schroders offered Lloyds a stake in its Cazenove Capital wealth management arm to sweeten the deal, the Financial Times reported last Wednesday.Over the weekend it was reported by Sky News the two companies have agreed but not yet signed a three-part deal, with Lloyds taking a 19.9% stake in Cazenove Capital and a 50.1% in a new wealth management joint venture with £13bn of Lloyds wealth management assets.The Scottish Widows assets are currently managed by Standard Life Aberdeen, but Lloyds served noticed in February that it was withdrawing its mandate over "competition concerns" after its merger. Aberdeen bought Scottish Widows Investment Partnership from Lloyds in 2014 and then was bought by Standard Life in August last year.Lloyds argued that it was able to cancel the agreement with 12 months' notice because, after the Standard Life merger, Aberdeen had become a competitor. Under the 2014 deal Lloyds was allowed to end the arrangement if this happened.But SLA said Lloyds did not have the right to withdraw the funds and has demanded a £250m break fee from Lloyds at part of a legal dispute, the FT also revealed, which could reduce the size of the mandate for Schroders.