Virgin Money has signed an agreement to sell a 50% stake in its unit trust division to Aberdeen Standard Investments (ASI) for an upfront payment of £40 million.
The sale of 50 per cent (less one share) of VMUTM creates a strategic joint venture offering investments and pensions propositions.
The proposed joint venture, subject to regulatory approval, will combine Virgin Money's brand, scale and retail distribution expertise with ASI's investment, asset management technology and digital capability.
As a result of CYBG's acquisition of Virgin Money in October 2018, the joint venture will offer investment solutions to CYBG's combined customer base of six million customers, expanding beyond Virgin Money's existing three million customer base.
Under the terms, Virgin Money get an upfront payment of £40 million plus 50% of an amount representing: (a) the capital in the business at completion and (b) certain other costs.
The joint venture will enable Virgin Money to provide customers with access to a broader range of funds and solutions at a competitive cost, and is expected to transform Virgin Money's retail investment proposition, driving significant growth in funds under management and capital-efficient returns as well as offering excellent value for shareholders.
David Duffy, chief executive of CYBG, owner of Virgin Money, Clydesdale Bank and Yorkshire Bank, said: "We are delighted to take the next step forward in our partnership between Virgin Money and Aberdeen Standard Investments, enabling us to provide innovative and attractive investment solutions across the Group's six million customer base, through our national distribution.
Martin Gilbert, co-chief executive at Aberdeen Standard Investments, said: "The signing of the SPA that encompasses Virgin Money, Clydesdale Bank and Yorkshire Bank customers is an important milestone in progressing our joint venture with Virgin Money. The partnership offers a fantastic opportunity to develop a business that combines the best talents of Virgin Money and ASI.