finance news

Abrdn acquires online platform Interactive Investor for £1.5 Billion

Abrdn acquires online platform Interactive Investor for £1.5 Billion
Abrdn acquires online platform Interactive Investor for £1.5 Billion

Abrdn Plc has reportedly struck a deal of £1.5 billion to purchase Interactive Investor, an online investment platform as the company looks to expand its business in the increasingly popular web-based trading.

Abrdn, previously known as Standard Life Aberdeen, stated that it was purchasing a rapidly growing business that added around 46,000 customers in 2020 which excludes acquisitions, taking the total over 400,000.

Interactive Investor was bought from US-based private equity company JC Flowers, which controlled the firm through Antler Holdco, a holding company registered in Guernsey.

Richard Wilson, Interactive Investor’s Chief Executive, will continue to head the business, whose under-administration assets of around £55 billion will increase the direct investment business of Abrdn by five times to £69 billion.

Wilson is expected to directly report to Stephen Bird, the Chief Executive of Abrdn, who has prioritized the expansion into retail investment for Abrdn which is better known for conventional asset management on the client’s behalf.

The acquisition marks a substantial expansion by Abrdn into web-based direct investment. Companies like Interactive Investor and its competitor Hargreaves Lansdown allow individual investors to have control over their investments instead of handing them over to a fund manager.

These businesses are gaining significant traction owing to the development of web-based platforms and apps that ease the trading, and fuel interest in dealing with financial instruments.

While apps like eToro and Robinhood have focused on small-time day traders who mainly look for a quick profit on sometimes contentious assets like cryptocurrency. Typically, day trading platforms charge no subscription fee. Instead, they take a cut of trades and charge withdrawal fees.

The entry-level product of Interactive Investor needs a monthly subscription of £9.99, with customers able to establish free automatic investment plans but charged if they make over one trade per month.

For the record, Interactive Investor was founded by Sherry Coutu in 1994. Coutu operated the business until 2000, when it floated on the London Stock Exchange.

Source credit:

https://www.theguardian.com/business/2021/dec/02/abrdn-to-buy-online-platform-interactive-investor-for-15bn

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