Afternoon:
14°c
Lloyds Banking Group has sold its fund management arm Insight to the Bank of New York Mellon for £235 million.
Lloyds, which is 43% owned by the Government, inherited Insight when it took over the troubled mortgage lender HBOS last year. It has its own fund manager, Scottish Widows Investment Partnership, and has kept the two companies separate.
By the end of June, Insight had £122 billion under management, the seventh biggest in Britain, according to the Investment Management Association. Its pre-tax profit for the six months to the end of June hit £21.3 million, up 31% compared to the same period in 2008.
But now the funds are being divided up, with Lloyds retaining the Insight funds from its Halifax and Bank of Scotland that come from its own branches and the Clerical Medical arm. These will transfer from Insight's Old Broad Street offices in the City to Edinburgh, to be run under the Scottish Widows Investment Partnership umbrella.
The rest, totalling some £125 billion and drawn from pension schemes, local authorities and other big institutional investors will transfer to Bank of New York Mellon.
About 500 staff currently work at Insight. Some will transfer either to Bank of New York Mellon or Edinburgh, but talks have started over job losses.
More than ten potential buyers had submitted bids for the Insight funds, including Schroders, Hellman & Friedman - the private equity group behind Gartmore - Commonwealth Bank of Australia and Macquarie Bank.
