Virgin Money has announced it is set to purchase abrdn’s 50% stake in the duo’s joint venture, ‘Virgin Money Investments’.
As per the agreed terms, pending customary approvals, Virgin Money will purchase abrdn’s 50% stake in Virgin Money Unit Trust Managers Limited1. The acquisition will be made through a £20m cash payment, financed solely from the banking provider’s existing capital reserves.
The two firms established the joint venture in 2019, creating a new proposition for retail investors. The offering included a digital platform and a variety of investment options, which debuted for customers in April 2023 and a new pension plan was introduced on the same platform in November 2023.
Virgin Money has said that the main driving force behind the decision to buy out abrdn is due to the “achievement of these significant milestones”.
Allegra Patrizi, Managing Director of Business and Commercial at Virgin Money, commented: “Our joint venture with abrdn has successfully delivered a new investment service offering simple and straightforward investment options for customers.”
This news shows Virgin Money’s drive to provide new and enhanced services for its customers, like when it entered the BNPL space in 2022 by announcing its new credit card, Virgin Money Slyce, which aimed to allow customers to ‘buy now, pay better’.
By obtaining abrdn’s stake, the banking service provider will be able to “pursue profitable growth”, enabling Virgin Money and abrdn to focus on their respective strengths.
Following the transaction, abrdn will continue to provide the investment advice for Virgin Money Investments, allowing Virgin Money to focus on broad appeal and distribution, and abrdn to focus on asset management.
As of December 2023, Virgin Money Investments oversaw approximately £3.7bn in assets across more than 150,000 customer accounts and has said that it aims to double the assets managed by the service over the next five years.
Patrizi added: “Taking full control of Virgin Money Investments will mean we can bring the investments and pensions business together with our deposits, mortgages, credit cards and daily banking, enabling us to help more customers feel confident to invest for the future and driving significant growth in assets under management.”
