Fidelity International has agreed to purchase the personal investing business of Legal and General Investment Management (LGIM), which will increase its client base by two-fold.
The business will now form part of Fidelity’s own personal investing platform.
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Transaction details
The business includes £5.8bn ($7.5bn) of AUM in legacy ISA, junior ISA as well as general investment account products.
The deal will add 300,000 customers to the acquirer. Upon deal completion in the next 12 months, Fidelity’s personal investing business will have £20.3bn in AuM and 280,000 customers.
These customers will remain invested in LGIM funds, while the firm continues to earn an investment fee.
However, Fidelity said LGIM clients will pay the same or less than they do at present.
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By GlobalDataAt the same time, they will gain access to Fidelity’s online guidance services and investment tools, and can also avail Fidelity’s iOS and Android apps.
LGIM’s intermediary retail business, clients or associated pension and investment offerings well remain unaffected by the deal.
LGIM CEO Michelle Scrimgeour calls the acquisition a positive step mainly for its direct to consumer business.
He stated: “It optimises the strategic fit between two highly-regarded organisations and in particular supports customers, who now gain Fidelity International’s scale and operational capacity in these specific products while continuing to benefit from the LGIM investment expertise which underpinned their original product purchase.”
Legal & General expects the deal to have a non-material impact on its earnings and solvency.
Financial details of the transaction were not revealed.
“The transaction therefore gives customers the best of Fidelity International’s large scale administration and the LGIM investment expertise that they chose,” L&G noted.
Fidelity International global head of Personal Investing and Advisory Stuart Welch welcomed the deal, saying that it reflects the firm’s “commitment to the UK direct investor market”.
Earlier this month, Fidelity acquired Cavendish Online Investments. The takeover added 30,000 customers and £900m of AuM to Fidelity.
