Newton Investment Management is set to lose almost £1bn in assets under management following plans f...
Newton Investment Management is set to lose almost £1bn in assets under management following plans from Royal Bank of Scotland Group to move the management of its retail funds to Morley from 1 March next year.
The NatWest retail funds will continue to be managed by Gartmore and will retain their separate branding.
The switch to using Morley's fund management capabilities follows on from the bank's bancassurance tie-up with Morley's parent company CGNU last year. Under the terms of the arrangement, Norwich Union's life and pension products are distributed through the bank's branch network via the 50:50 bancassurance venture. Royal Bank of Scotland had held a 33% stake in Newton before selling it to Mellon Financial in 1998.
Carolyn McAdam, spokeswoman for Royal Bank of Scotland, said the change follows a standard and regular review of the group's external relations and the use of Morley will enable it to consolidate its non-banking offering to customers.
McAdam added: 'We are still some way from the transfer. There is generally a 12-15 month transition period, so Morley will not start running the funds until spring next year.'
The £901.2m of assets is split across Royal Bank of Scotland's seven unit trusts, more than £435m of which had been managed by Robert Shelton.
Simon Wombwell, head of distribution at Mellon Global Investments, stressed performance was not an factor in Royal Bank of Scotland awarding the contract to Morley.
Wombwell added: 'CGNU is taking a 50% stake in the new business and is already a strategic partner through its historical relationship with Royal Scottish Assurance. It is clear the relationship between the two companies is a main driver in this agreement.'
The final details of the Morley contract are still being finalised and, as such, Morley has refused to comment. It is expected, however, that the Royal Bank of Scotland Growth fund will be taken over by David Lis. The bank's corporate bond fund, Royal Bank of Scotland High Yield, will be run by Paul Mingay, the Income fund by Scott McKenzie and the International Growth, Balanced and Platinum funds by Steve Cleal, with the Cash fund being run by Howard Wood.
It is unclear whether further funds will be added to the Royal Bank of Scotland range at this stage, although the bank has no funds in the core US, Europe ex-UK and Japan sectors.
Five of the seven Royal Bank of Scotland funds currently have Standard & Poor's ratings, four of which are AA or higher, but these will be reviewed after Morley takes over.
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