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Schroders to give Lloyds stake in Cazenove in battle for £109bn mandate

Schroders to give Lloyds stake in Cazenove in battle for £109bn mandate

Schroders is looking to allow Lloyds Banking Group take some control of its wealth arm Cazenove Capital as it climbs to the top of the list to win over the management of the bank’s £109 billion mandate.

According to the Financial Times Schroders is set to beat BlackRock in the battle for Lloyd’s mandate, which had been managed by Standard Life Aberdeen since 2014. Lloyds pulled the contract in February over competition concerns following the merger of Standard Life and Aberdeen Asset Management.

Relations between the two companies deteriorated since then, with Lloyds  selling its remaining 3.3% stake in Standard Life Aberdeen in June.

Lloyds netted £344 million from the disposal, which represented 98 million shares at a price of 352.5p each.

Since Standard Life Aberdeen was taken off the mandate, there have been a number of business pitching for it including Goldman Sachs and JP Morgan. However, according to reports the last two remaining contenders are Schroders and BlackRock.

The FT also reported that Standard Life Aberdeen is demanding a £250 million break fee from Lloyds, raising concerns at Schroders.

Schroders bought Cazenove in 2013 for £424 million and the wealth firm has grown to manage £46 billion of assets.

This will not be the first time Lloyds has had a stake in a wealth management business. It previously owned a stake in St James’s Place. It began decreasing its holding in the company at the start of 2013 and sold its remaining stake for £670 million back in December 2013.

 

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