Standard Life’s merger with Aberdeen Asset Management is driven by a need for scale to challenge the big US houses and is not a response to the rising popularity of passive investing, Martin Gilbert has said.
Standard Life announced the agreed £3.8bn merger on 6 March, which will create a group managing £660bn of assets if the deal closes later this year as scheduled.
“You either want to be big or small, you do not want to be in the middle ground,” Aberdeen’s chief executive explained, while discussing the deal at the Pensions and Lifetime Savings Association (PLSA) investment conference.
“Perhaps both of us were at the bottom end of the Premier League and I hope that this moves us slightly further up that league table,” he added.
“The problem was that we were both wrongly known for being one-trick ponies,” Gilbert (pictured) said in Edinburgh, “Standard Life for GARS and us for emerging markets.
“This [deal] gives us the opportunity to create a world-class investment company that is capable of competing against the big American houses,” he added. “Even after this, when we will be number one in Europe by revenue, we will still only be around number 18 or 19 in the world, so there is a long way to go.”
Gilbert will share the chief executive role of the combined group with Keith Skeoch. On this point he said that co-heads are “very common” and that he and Skeoch have “complementary strengths”.
