Virgin Money and Aberdeen Standard Investments announced on Tuesday they agreed in principle to enter into a new strategic joint venture for the provision of asset management services to Virgin Money customers.

As part of the joint venture, Aberdeen Standard will provide fund management services and access to its state-of-the-art digital technology.

Virgin Money currently has more than 200,000 retail investment customers and £3.7 billion in assets under management.

The proposed joint venture with Aberdeen Standard will broaden Virgin Money’s retail investment proposition.

Subject to “further mutual due diligence, regulatory and other relevant approvals and agreement of definitive contracts” Aberdeen Standard is expected to acquire 50% of Virgin Money Unit Trust Managers Limited (VMUTM) for an upfront cash payment in excess of £40 million.

Virgin Money Jayne-Anne Gadhia said: “Our new partnership with Aberdeen Standard Investments will bring together two outstanding innovative brands.

“We look forward to using our brand and customer reach, combined with ASI’s strength in asset management and its digital capability, to provide a market-leading customer proposition.

“This mutually beneficial relationship will give our customers a broader fund choice and the tools and capability to invest for the future with confidence.

“As a result, it offers a compelling proposition for our customers and offers excellent value for our shareholders.

“It is expected to generate significant growth in assets under management, drive additional capital-light returns and to be game-changing for our investment business over the longer term.”

Martin Gilbert, co-chief executive at Aberdeen Standard Investments, said: “We’re delighted to be partnering with Virgin Money to develop their retail investment business.

“Their customer focus mirrors that of Aberdeen Standard Investments and we look forward to working together and sharing a strong and profitable relationship over many years to come.”