Aberdeen CEO Martin Gilbert has said Lloyds Banking group's plan to boost its wealth management capabilities is a crucial factor in the fund manager's deal to buy SWIP, but refused to be drawn on possible job cuts.
In a conference call this morning, Gilbert (pictured) said the purchase of SWIP's investment solutions division, responsible for the design, development and management of multi-asset solutions for Lloyds' wealth clients, is the element that led Aberdeen to the £650m deal.
The business provides advice on about £15bn of Lloyds wealth clients' discretionary assets.
"It is the part of the business that sits between SWIP and Lloyds Bank. It makes a genuine relationship between the two. It is that close relationship with Lloyds customers that really attracted us to do this deal."
"You could bid for SWIP with or without [the solutions business]. We were of the view it was absolutely vital it was included. We would not have done the deal without that business," he said.
With Aberdeen and Lloyds forming a strategic partnership as part of the acquisition, the two companies will work together to further the bank's wealth management ambitions, Gilbert said.
"We will work with Lloyds to increase their market share in wealth in the UK. They are the dominant UK retail bank, and they want to be a bigger player in the wealth market."
The chief executive also suggested the solutions business was not on the table when Aberdeen first looked at a possible deal for SWIP earlier this year.
Aberdeen will pay around £550m upfront for SWIP, with a further £100m dependent on the performance of the solutions unit over the next five years.
That latter fee will more than pay for itself if Aberdeen and Lloyds succeed in expanding the business, Gilbert added.
"If we do pay £100m, that will be a fantastic deal for us, because the AUM and business that has flown in will more than pay for it."
Aberdeen funds will also made be available to Lloyds retail investment customers through its bank branch network, the CEO implied.
The asset manager said this morning it anticipates an operating margin of 55% at SWIP post-acquisition, implying significant cost savings.
That follow reports earlier this month which suggested the group could cut 150 jobs from the combined Aberdeen/SWIP workforce as a result of the deal.
Gilbert acknowledged there will be "some" job losses, but said it is too early to say where those cuts will fall, and insisted the deal is based "on growth rather than cutting jobs".
"The deal is not [predicated] on cost-cutting. Edinburgh will be managing more than half the group's assets, so it is going to be a very important centre for us."
Separately, the chief executive confirmed Aberdeen will combine the capabilities of its multi-manager business with SWIP's own offering in the space, rather than running the teams on a standalone basis.
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