Virgin Money has agreed to purchase abrdn‘s 50% stake in their joint venture, Virgin Money Investments, following the launches of its new investment and pension services for customers.

Established in 2019, the joint venture combined abdrn’s and Virgin Money’s specialisms to create a new proposition for retail investors.

The service, comprising a new digital platform as well as a range of investment products, launched to customers in April 2023.

A new pension was launched on the platform in November 2023, and all existing investment and pension accounts held on the old platform were successfully migrated to the new platform in January 2024.

Following the achievement of these significant milestones, Virgin Money will now take full ownership of Virgin Money Investments, representing a step forward in Virgin Money’s strategy to pursue profitable growth.

“Our joint venture with abrdn has successfully delivered a new investment service offering simple and straightforward investment options for customers,” Allegra Patrizi, managing director, business and commercial, at Virgin Money said.

The purchase will enable Virgin Money and abrdn to focus on their respective strengths; Virgin Money’s broad appeal and distribution and abrdn’s strength in asset management. Following the transaction, abrdn will continue to provide the investment advice for Virgin Money Investments.

Virgin Money Investments had total assets under management of c.£3.7bn and over 150k customer accounts 31 December 2023. Virgin Money’s ambition is to double assets under management for Virgin Money Investments within the next five years.

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“Taking full control of Virgin Money Investments will mean we can bring the investments and pensions business together with our deposits, mortgages, credit cards and daily banking, enabling us to help more customers feel confident to invest for the future and driving significant growth in assets under management,” Patrizi said.

Under the terms of the deal, which is subject to customary approvals, Virgin Money will acquire the 50% of Virgin Money Unit Trust Managers Limited¹ currently owned by abrdn, for a cash payment of £20 million, funded entirely from Virgin Money’s existing capital resources. The transaction is expected to consume c.5bps of Common Equity Tier 1 capital on day one at completion, which is anticipated to be during April.