The Wall Street giant Goldman Sachs has joined the race to manage a £109bn investment management contract put up for grabs by Britain’s biggest high street lender.
Sky News has learnt that Goldman Sachs Asset Management (GSAM) is participating in a second round of bidding for the Lloyds Banking Group deal, turning the contest into a four-way tussle between some of the world’s largest institutional investors.
GSAM’s involvement will intensify City interest in the process, which was sparked by last year’s merger of Standard Life and Aberdeen Asset Management, the latter of which had managed the £109bn contrast since 2014.
Blackrock, JPMorgan Asset Management and Schroders are the other parties bidding for the mandate, the destination of which is expected to be decided during the summer.
Lloyds’ decision to terminate the relationship with Standard Life Aberdeen, which largely encompasses insurance assets in the bank’s Scottish Widows arm, sparked a bitter legal response from the Edinburgh-based fund manager.
In a statement last month, SLA said it did “not agree that, following the merger of Aberdeen Asset Management and Standard Life, SLA was in material competition in the UK with LBG and that, therefore, SLA does not consider that LBG, Scottish Widows or their respective affiliates has the right to terminate the [arrangements]”.
“The parties are engaging with each other within the framework of the dispute resolution process.”
City sources said that Martin Gilbert, co-chief executive of SLA, held an initial meeting with a senior Lloyds executive to discuss the pending arbitration process in recent weeks.
A Lloyds Banking Group spokesperson had said in response to SLA’s move that it was “not credible” to suggest that the asset manager was not a competitor of Scottish Widows.
The fight to replace SLA is one of the most hotly contested in the asset management sector this year.
GSAM has seen significant growth in its assets under supervision during the last five years, and is now the steward of $1.5trn globally.
Investment management, which also includes private wealth activities, accounted for almost a fifth of Goldman’s total revenues last year.
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GSAM was recently chosen by the Irish government alongside Amundi and Blackrock to manage the escrow account for $13bn in back taxes owed by Apple.
A GSAM spokesman declined to comment.