Schroders (LON:SDR) is poised to beat BlackRock in a battle to win the auction for Lloyds Banking Group’s (LON:LLOY) £109-billion investment contract, the Financial Times has reported. The news comes after the bailed-out lender recently dropped Goldman Sachs from the auction for one of Europe’s largest investment mandates.
Lloyds’ share price has been steady in London this morning, having added 0.30 percent to 57.64p as of 09:43 BST, fractionally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.41 percent higher at 7,505.00 points. Schroders’ share price meanwhile has jumped 1.14 percent higher to 3,014.00p.
Schroders set to win £109bn portfolio
Sources with knowledge of the matter told the FT that Schroders was poised to beat BlackRock in the auction to manage Lloyds’ £109-billion portfolio of assets. The UK-listed manager is reportedly discussing allowing the bailed-out lender to take some control of its Cazenove Capital wealth arm, a business it bought five years ago.
Schroders has edged out tough competition for the pool of assets from BlackRock in the final round. One option reportedly still under consideration, however, is to offer BlackRock a smaller slice of the total assets to manage, with the UK fund manager taking the majority.
Bailed-out lender locked in talks with SLA
The auction comes after Lloyds moved to pull the assets under management from Standard Life Aberdeen (LON:SLA) earlier this year. Sources further told the FT that the bailed-out lender has been locked in tense negotiations with SLA, which is demanding a £250-million break fee. This is said to have caused concern at Schroders, whose executives worry that the more Lloyds is forced to pay out to Standard Life Aberdeen, the less money will be in the pot for the new mandate.