Aberdeen is to transfer in excess of £3bn in assets into its own fund range, following its acquisiti...
Aberdeen is to transfer in excess of £3bn in assets into its own fund range, following its acquisition of the £5.5bn book of business from the Life Assurance Holding Company (LAHC), writes Robert Stock.
The £5.5bn in assets, which Aberdeen purchased for £86m, represents the assets of the 750,000 policy holders in Windsor Life Assurance, which LAHC owns.
More than 60% of the assets in Windsor Life Assurance are held in unit trusts of many of the larger unit trust managers. These assets, in excess of £3bn, will in due course be transferred into Aberdeen unit trusts and will boost the group's assets under management by some 19.3% to around £34bn.
To fund the acquisition, Aberdeen is issuing £10m in loan notes and 15 million new ordinary shares, a sum that represents 9.7% of its existing ordinary share capital. Aberdeen's gearing at the financial year end September 2000 was 25.5%, a figure that is set to rise following the deal. Aberdeen is set to earn around £11m a year on the business an annual fee of around 0.2%. The contract will run for a period of no less than 10 years.
LAHC said that the new deal, which will also see Aberdeen gain a fixed interest manager and two investment administrative staff from LAHC, will reduce overall costs to policy-holders by around 0.15%.
Annuity market worth £4bn in 2017
For ‘distress’ caused
Oversees £30bn of advised and D2C assets
Less than a third of top paid employees are women
£1bn business since inception