Schroders winning race for Lloyds' Scottish Widows mandate - report

3rd Oct 2018 09:22

(Sharecast News) - Schroders is poised to win a £109bn mandate from Lloyds Banking Group to manage its Scottish Widows investment assets, according to a newspaper report.Lloyds served noticed to Standard Life Aberdeen in February that it was withdrawing its mandate over "competition concerns" after its merger.The Financial Times reported on Wednesday that BlackRock was likely to be pipped to the contract after Schroders offered Lloyds a stake in its Cazenove Capital wealth management arm to sweeten the deal.Standard Life Aberdeen, which said Lloyds did not have the right to withdraw the funds, has demanded a £250m break fee from Lloyds at part of a legal dispute, the FT also revealed, which could trim the new mandate.Aberdeen bought Scottish Widows Investment Partnership from Lloyds in 2014 and Lloyds argued that it was able to cancel the agreement with 12 months' notice because, after being bought by Standard Life, Aberdeen had become a competitor. Under the 2014 deal Lloyds was allowed to end the arrangement if this happened.SLA, which has taken £40m impairment charge for the Lloyds relationship that generated annual revenue of £129m in 2017, argued that Lloyds was not correct and entered a dispute resolution process.