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BlackRock wins race for £30bn Scottish Widows mandate

Scottish Widows has awarded the contract to manage £30 billion in passive index strategies to BlackRock

BlackRock wins race for £30bn Scottish Widows mandate

Scottish Widows has awarded the contract to manage £30 billion in passive index strategies to BlackRock under the terms of a wider collaboration agreement on alternative assets and tech.

As revealed by New Model Adviser® in August this agreement is likely to include platform technology aimed at the direct to consumer market. 

The agreement follows the group’s decision at the beginning of the year to pull a £109 billion contract from Aberdeen following the company’s merger with Standard Life.

Standard Life Aberdeen is currently pursuing arbitration. Scottish Widows parent Lloyds said that the funds would be transferred ‘upon conclusion of the current arbitration process… or when the existing contract expires’ and said it expected to receive a ruling early next year.

It added that it hoped to be able to finalise a decision on the remaining £80 billion in assets shortly.

In addition to running a significant chunk of Scottish Widows’ pension assets,  the company said it would sign ‘a strategic partnership with BlackRock including collaboration in alternative asset classes, risk management and investment technology’.

New Model Adviser® understands this will include BlackRock's platform and risk management technology and operating system Aladdin.

Chief executive of Scottish Widows Antonio Lorenzo said: ‘BlackRock has been selected following a competitive tender process in which it clearly demonstrated its global market leading capabilities and deep expertise in the UK market. 

‘The partnership will ensure that Scottish Widows and the group can deliver good investment outcomes for its customers over the coming years.’

BlackRock had earlier been reported to have been cut out of negotiations for the assets after Lloyds signed a £13 billion joint venture deal with Schroders establishing a wealth management partnership as part of a multi-stage agreement, including the transfer of the pension funds.

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