Axa Investment Managers (Axa IM) will hand €34bn (£24bn) of assets to Aviva Investors following Aviva’s acquisition of Friends Life last year.
The windfall is expected to come as Aviva Investors parent company and new Friends Life owner Aviva transfers Friends Life assets currently outsourced to Axa IM over to its own asset management arm.
Aviva Investors has already received £20bn of assets previously managed by Friends Life Investments as part of the purchase.
Aviva said at the time of the acquisition there was an opportunity to move the management of up to £70bn of Friends Life’s UK assets to Aviva Investors.
An Aviva spokesperson added: “We have been examining this opportunity whilst giving utmost consideration to our customers’ interests. Friends Life employs Axa Investment Managers, amongst others, to manage a number of funds on behalf of our customers. From time to time, as part of our monitoring of external managers, we review the funds, taking into account the interests of our customers.
“This review included funds managed by Axa IM and we have decided at this stage to move some funds currently managed by Axa IM to Aviva Investors later this year.”
The assets are principally a mixture of fixed income, equities and real estate which are mainly unit linked assets from two Friends Life insurance companies – Friends Life Limited and Friends Life and Pensions Limited – both managed on a segregated basis and via investments in certain Axa IM onshore funds.
A statement from Axa IM said it manages €50bn on behalf of Friends Life and anticipated over a period of time, some of the remaining €16bn (£11bn) may also be removed.
It added: “We anticipate that this withdrawal will have a limited negative impact on Axa IM’s underlying earnings for 2016. Axa IM will be compensated by a one-off withdrawal fee, which will be accounted for in our net income. This move has been anticipated for some time now and has been factored into our strategic planning. We are convinced that the diversity of our business across asset classes, clients and geographical locations will enable us to achieve our growth ambitions.
“Our strong investment performance and focus on delivering the highest level of service means that we continue to grow as a business with more and more clients around the world entrusting us with their assets. As at end June 2015, Axa IM had €26.7bn of net new money inflows and a total AUM of €694bn.”
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