Established in 2019, the joint venture in question was formed to leverage the two companies' respective expertise in developing a new proposition specifically for retail investors. This service, comprising a digital platform and a range of investment products, debuted for customers in April 2023. Subsequently, a new pension offering was introduced on the platform in November 2023, with all existing investment and pension accounts migrated to the new platform the following month.
Virgin Money will now assume full ownership, while abrdn will continue to provide investment advice for Virgin Money Investments. As of 31 December 2023, according to insider.co.uk, the venture managed total assets of approximately GBP 3.7 billion and serviced over 150,000 customer accounts. The same source reveals that Virgin Money aims to double its assets under management within the next five years.
Under the agreed terms, subject to customary approvals, Virgin Money will purchase abrdn's 50% stake in Virgin Money Unit Trust Managers for a cash payment of GBP 20 million, funded entirely from Virgin Money’s existing capital resources. The transaction is expected to conclude in April 2024.
Representatives from Virgin Money cited by insider.co.uk expressed confidence in the success of the joint venture, emphasising its role in simplifying investment options for customers. They also noted that consolidating Virgin Money Investments under Virgin Money's umbrella would facilitate integration with other financial services, supporting customer confidence in investing for the future and driving substantial growth in assets under management.
The proposed transition entails all existing staff at Virgin Money Investments relocating to Virgin Money, with no anticipated job losses.
In November 2023, Virgin Money announced its plan to buy back a further GBP 150 million of its shares in order to boost the development process of its overall business.
The financial institution previously expected to announce a total of GBP 125 million of buybacks, in addition to its overall full-year results. As the guidance for shareholder returns in 2023 was lower than the analyses estimated, shares were trading down to 2.2% at 153.4 pence.
At the same time, Virgin Money took an impairment charge of a sum of GBP 309 million, compared to the previous year’s results, which were estimated at GBP 52 million. The process was driven by its credit card business.
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