Lloyds will benefit from around £35bn of assets under administration on behalf of nearly 410,000 consumer clients of Embark.
Lloyds Banking Group has is set to acquire the Embark Group, an investment and retirement platform business, for around £390m.
Established in 2013, as a digitally-led retirement solutions business, Embark had more than £40.8bn of assets under administration, backed by more than 425,000 clients.
The transaction excludes Embark’s Rowanmoor SIPP and SSAS administration business, which will be retained by its existing shareholders. This represents about £5bn out of the overall assets under administration.
With the acquisition, Lloyds is expected to benefit from around £35bn of assets under administration on behalf of nearly 410,000 consumer clients of Embark.
The firm intends to fund the acquisition in cash, through its strong capital position.
Lloyds Banking Group Insurance and Wealth director Antonio Lorenzo said: “There’s an ever-growing customer demand for clear, simple and affordable financial planning and retirement products and services.
“Our acquisition of Embark will not only help us serve all of a customer’s financial needs in one place, but also sit alongside our existing partnerships which meet the more complex financial planning and investment requirements of mass-affluent and high net-worth customers through Schroders Personal Wealth and Cazenove Capital.”
With the acquisition of Embark, the company aims to enhance its capabilities to address the attractive mass market and wealth segment and complete its wealth proposition.
According to its Strategic Review 2021, Lloyds aims to address its customers’ financial needs, while retaining around £10bn assets under administration annually.
The transaction is expected to complement the firm’s existing advice offerings through Schroders Personal Wealth and Cazenove Capital.
Lloyds intends to exploit Embark’s technology to increase the reach of its investment offerings for customers who wish to manage their own portfolios.
Also, it is planning to restructure its pensions and retirement platform for intermediaries and strengthen its retirement offering through Embark.
The deal is expected to close in the fourth quarter of 2021, subject to regulatory approvals.
Furthermore, Lloyds has agreed to work closely with Embark’s existing asset management partners, BlackRock and Franklin Templeton, upon completion of the transaction.
Embark chairman David Barral said: “In eight short years, Embark has built one of the most respected and fastest-growing digital retirement and savings businesses in the UK.
“The combination of Lloyds Banking Group’s financial strength and distribution reach, with the agility, digital capability and expertise of Embark, will provide the perfect opportunity to create a market-leading proposition for consumers, intermediaries and strategic partners.”