Standard Life Aberdeen chair Grimstone to step down

The chairman of Standard Life Aberdeen is to step down within two years of helping to create one of Britain’s biggest fund managers in an £11bn merger.


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Standard Life Aberdeen chairman plots exit amid £3bn Phoenix deal

Standard Life Aberdeen will announce on Friday that Sir Gerry Grimstone is to step down next year, Sky News learns.

Image:Standard Life Aberdeen is a FTSE 100 company

By Mark Kleinman, City Editor

The chairman of Standard Life Aberdeen is to step down within two years of helping to create one of Britain’s biggest fund managers in an £11bn merger.

Sky News has learnt that Sir Gerry Grimstone, who was the architect of last year’s tie-up between Standard Life and Aberdeen Asset Management, will leave next year once a successor is in place.

An announcement about his exit is expected to be made alongside the company’s full-year results on Friday, according to a City source.

Standard Life Aberdeen is also expected to confirm that it is selling its insurance unit to Phoenix, the consolidation vehicle, in a £3bn cash-and-shares deal.

Under the terms of the transaction, the Edinburgh-based asset manager will take a 20% stake in Phoenix.

Phoenix, run by Clive Bannister, will pay just over £2bn of the purchase price in cash funded partly through an equity-raising, sources said.

The news of Sir Gerry’s departure will come days after Standard Life Aberdeen, which oversees £646bn of assets, was dealt a body-blow when Lloyds Banking Group announced that it was withdrawing a contract to administer £109bn on behalf of the lender’s insurance assets.

Sir Gerry Grimstone will be chairman of the new company
Image:Sir Gerry Grimstone will leave next year once a successor is in place

Sources said on Thursday night, though, that the deal with Phoenix would remove the main competition hurdle to Standard Life Aberdeen continuing to manage those assets.

Sky News revealed last weekend that talks between Lloyds and Standard Life Aberdeen about a £5bn merger of their respective insurance businesses had broken down amid a disagreement over its ownership structure.

Sir Gerry’s decision to leave next year is, in one sense, unsurprising.

He had chaired Standard Life since 2007, and is also deputy chairman of Barclays, where he is expected to be a frontrunner to replace chairman John McFarlane in the next couple of years.

A former privatisation adviser to Margaret Thatcher, Sir Gerry is one of the City’s best-known figures.

However, the news of the chairman’s medium-term exit may cause jitters among investors already disquieted by the level of fund outflows from the merged company.

The deal between Standard Life Aberdeen and Phoenix will be the latest transaction between them, following Standard Life’s acquisition of Ignis, an asset manager, in 2014.

Sources said that Sir Gerry, along with Standard Life Aberdeen’s joint chief executives, had engineered the Phoenix deal after talks with Lloyds broke down.

It clears the way for Standard Life Aberdeen to potentially retain the £109bn mandate from Lloyds it lost last week.

Citing competition between Scottish Widows and SLA’s insurance arm, Lloyds said it would review its long-term asset management arrangements.

While the assets managed by SLA on behalf of Lloyds represented roughly 17% of its total assets under management, they only accounted for about 5% of group revenues.

“We are disappointed by this decision in the context of the strong performance and good service we have delivered for LBG, Scottish Widows and their customers,” Martin Gilbert and Keith Skeoch, Standard Life Aberdeen’s joint chiefs, said last week.

A spokesman for Standard Life Aberdeen declined to comment.

Story Originally Published On SkyNews.com

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