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Standard Life chairman

Interview: Sir Gerry Grimstone

Gerry Grimstone

Sir Gerry Grimstone: confident


Going for growth

Standard Life chairman Sir Gerry Grimstone said the minimal overlap with Aberdeen Asset Management gave the newly combined company a huge platform for growth.

The two financial giants, which are expected to consummate their merger at shareholder meetings next month, are in different segments of the market and in different geographies, he said. Of each company’s top 50 clients they found that only four were shared.

Speaking ahead of Standard Life’s last AGM as an independent company, he stressed that the proposed merger was not defensive and he had every confidence that the shared CEO arrangement would work, not least because of their different personalities.

It is expected that some offices will close in the 16 locations where they are both present. He would not comment on the future of the Aberdeen Asset Management operations in the former SWIP offices in Morrison Street, Edinburgh.

However, it is accepted that some offices will be merged.  Standard Life Investments will be expanding into new offices in St Andrew Square in the city.

He said that discussions were under way with key managers and that there would be some fall-out where two people are doing similar jobs. The companies have already stated that 800 roles are likely to be lost.

Sir Gerry stressed, however, that the plan was to grow the business and said new jobs would be created.

“We are creating a growth company and I would be disappointed if this company did not create jobs,” he said.

“Yes, there are places where there are two offices and you would expect this overlap to be eliminated.”

He said there was “surprisingly little overlap” in where the businesses are based and in their client lists.

“Frankly, that surprised us. It means there are great possibilities to extend the client base.”

He confirmed that the headquarters of the new group would be Edinburgh and did not see any problem in it being called Standard Life Aberdeen.

“We are proud to be Scottish. We are building a global business here,” he said, adding that in the event of a second independence referendum the company would respond “carefully”, as it did last time when it made contingency plans to register some of its funds in London.

Similarly, the company is making preparations to register operations in Dublin in the event that  “passporting” will not be available to clients in Europe post-Brexit. It would involve only a “handful” of staff, he said.

“We have half a million customers [in Europe] who benefit from passporting. No one can say for certain if passporting will be available post-Brexit. We have to think carefully about this.”

Keith SkeochOn the plan for having two CEOs, he said Standard Life’s Keith Skeoch (right) and Aberdeen’s Martin Gilbert were very different and this would help the arrangement work.

Mr Skeoch will look after the “fabric” of the company, while Mr Gilbert will be focused on distribution and marketing.

“You could not conceive of two more different characters,” said Sir Gerry. “One is an economist and the other likes being out on the road. I’ll leave you to decide which is which.”

* Mr Skeoch later told the meeting that the merger with Aberdeen would give the combined company the scale it requires to invest in its people and technology.

While Sir Gerry earlier played down questions over a shift of focus, Mr Skeoch on several occasions referred to creating a “world class investment company”, and noted that it had been reclassified on the market from the life sector to asset management.

He was confident that 75% of the proposed £200m cost saving over three years would be achieved by year two.

“We will do everything we can to minimise compulsory redundancies,” he said.

The combined company will have £2.8bn in revenue, £1bn in profit and £865m in cash flow.

“It’s scale will support our progressive dividend policy and our ability to invest in people and technology and create a truly diversified business.”

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