The company’s predictions come after an Aviva spokesperson confirmed today that it will acquire funds currently managed by Axa IM later this year as part of a wider acquisition of up to £70bn worth of Friends Life’s assets.
Axa IM said the outgoing funds will have a “limited negative impact” on its underlying earnings for 2016 despite the receipt of a one-off withdrawal fee, which will be accounted for in its net income. It added that the shift has been anticipated for some time and has been factored into the company’s strategic planning.
“Following the purchase of Friends Life by Aviva, we expect €34bn of the €50bn we manage on behalf of Friends Life will transition to Aviva Investors by the of 2015,” an Axa IM spokesperson said.
“From the outset, Aviva made it clear that the acquisition offers the opportunity to increase Aviva Investors’ assets under management by recapturing previously outsourced asset management contracts.”
Outsourcing
An Aviva spokesperson said the company review its externally managed funds “from time to time” as part of its monitoring of external managers.
“This review includes funds managed by Axa IM and we have decided at this strage to move some funds currently managed by Axa IM to Aviva Investors later this year,” it said.
Aviva added that it has been looking at how to transfer the management of Friends Life’s assets without affecting customers, and has so far transferred £20bn of the company’s assets through Friends Life Investments.
Aviva agreed the terms of its £5.6bn merger with Friends Life in December last year with the expectation that the acquisition will save the two companies £225m by the end of 2017 through increased dividend flow among other factors.
Earlier this year, International Adviser confirmed that Friend’s Life offshore division, Friends Provident International, will continue to operate under its current name following the deal, which is expected to bring Aviva’s assets under management to a total of £309bn.
