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Abbey confirms job losses in outsourcing plan

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UK – Abbey National has confirmed that jobs will go as it plans to outsource most of the in-house fund management of its 29 billion-pound (42 billion-euro) portfolio.

The move to a multi-manager format will see State Street Global Advisors take a transition role from January 26 and some mandates. It will result in around 60 jobs being made redundant at Abbey’s fund management and back office operations in Glasgow.

“They are getting everything except property, controlled risk, cash and structured products,” said Abbey spokeswoman Christina Mills of State Street’s transition role. Those four asset classes would be retained in house for the time being until mandates were awarded. Property and controlled risk are worth a combined two billion pounds, Mills said.

Abbey’s specialist direct property investment team of 11 in Glasgow will be retained.

Mills added that no other mandates had been awarded yet and that Abbey was just starting the request for proposal process.

Kanesh Lakhani, marketing director at SSGA, said the firm had been appointed to manage a “significant” portfolio of equity and fixed income assets, though he was not able to provide specifics.

He added the assets would be managed in London and that no jobs would transfer from Abbey.

Abbey said in a statement that it would be introducing a multi manager approach to all its actively managed bond and equity-based unit linked life and pensions and unit trusts. Abbey National Asset Managers would cease the majority of in-house active fund management.

“We believe multi manager will deliver to the customer the best investment performance commensurate with their approach to risk,” said Mills. Abbey said the decision would not have a material financial impact initially, though it would benefit in the long term.

“By extending a multi manager approach to the majority of our investment range, we will be giving customers access to a range of top-class specialist fund managers, many of which are normally only available to institutional investors,” said Abbey chief executive Luqman Arnold.

Abbey is currently rationalising its existing 550 funds and will also cease managing funds for third party institutions.

Separately, SSGA said it has hired Andrew Rozanov as a senior manager in its Official Institutions Group. Rozanov was previously with UBS Investment Bank in Tokyo, though he has worked for SSGA before.

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