A bank branch of Lloyds Banking Group Plc, which opens for four hours, three days a week, stands in Cricklade near Cirencester, U.K. (Photographer: Luke MacGregor/Bloomberg)

BlackRock Wins $40 Billion Chunk of Lloyds Investment Pile

(Bloomberg) -- BlackRock Inc. won a mandate to manage 30 billion pounds ($40 billion) of assets for Lloyds Banking Group Plc, the latest twist in a hotly contested battle to win a slice of 109 billion pounds that Schroders Plc is also vying for.

Key Takeaways

  • Statement from Lloyds suggests more collaboration to come with the world’s biggest money manager, whose products run the gamut from alternative investments to risk management systems for managing assets.
  • Deal means the Scottish Widows assets that had been overseen by Aberdeen Asset Management will be handed over to more than one manager.
  • Schroders had been considered the front-runner to win the mandate. It remains to be seen how the remainder of the assets will be distributed. Lloyds confirmed talks with Schroders in a deal that may include wealth management.

Digging Deeper

  • BlackRock was selected after a competitive tender process, Lloyds says. Group is near to finalizing arrangements with respect to the remaining 80 billion pounds of assets.
  • Lloyds decided to take the mandate away from Aberdeen after it merged with Standard Life Plc, citing competition concerns.
  • Standard Life Aberdeen is still challenging Lloyds’ decision to cancel the contract in an arbitration tribunal. Lloyds said it expects that process to end early next year.
  • While the $40 billion is a fraction of BlackRock’s massive $6.3 trillion under management, the rest of the mandate would represent a significant boost to Schroders, which oversaw about 447 billion pounds at the end of last year.

Market Reaction

  • Schroders fell 4.1 percent to the lowest level since December 2016 on Thursday. The shares gained less than 1 percent Friday.

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