American investment management firm BlackRock has been awarded a £30bn investment contract by Scottish Widows, a UK-based life insurance and pensions company owned by Lloyds Banking Group.
BlackRock has been chosen after the review by the insurer and Lloyds Banking Group’s Wealth business of their asset management arrangements, stated Scottish Widows.
The UK-based insurer said that the £30bn forms part of £110bn funds managed by its previous partner Standard Life Aberdeen.
Meanwhile, the US-based firm can start the management of the assets only after the completion of the current arbitration process with Standard Life Aberdeen or when the existing contract expires.
Lloyds Banking Group expects the arbitration process to conclude in early 2019.
Apart from the £30bn mandate, Scottish Widows is pursuing a strategic partnership with BlackRock including collaboration in alternative asset classes, investment technology and risk management.
Scottish Widows chief executive and group director of insurance & wealth 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.”
Scottish Widows stated that it is in the process of finalizing arrangements in respect of the remaining £80bn of assets that are within the scope of the asset management review.
In September 2018, BlackRock wrapped up the previously announced acquisition of the asset management business of Mexican bank Citibanamex, a unit of Citigroup.
With this acquisition, BlackRock has added fixed income, equity, and multi-asset funds worth nearly $34bn in investments. Furthermore, it has also grown its footprint in Latin America and Iberia to nearly 275 professionals in eight offices with assets under management worth $184bn.
The transaction, which was announced in November 2017, was completed after receiving all the required approvals from Mexican regulatory bodies.
As of 30 June 2018, BlackRock has managed approximately $6.3 trillion in assets on behalf of investors across the world.