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Resolution could see its asset management arm swallowed by Standard Life if the takeover goes ahead. It’s not good news for its fund managers.

Standard Life is teaming up with Swiss Re in a bid to pip Friends Provident’s acquisition of the Glasgow-based insurer. Analysts predict that the overlap in asset management functions could see Resolution’s staff being forced to up sticks to Standard Life's Edinburgh office.

“We think that the asset management business would be folded into Standard Life Investments,” says Trevor Moss, insurance equity analyst at MF Global Securities (part of MAN Group), which is covering the takeover. “In many ways this is what Resolution proposed with Friends Provident – moving funds across, sharing platforms, moving staff across and moving assets around.”

But could this mean redundancies? Resolution’s fund management department consists only of 30 to 40 front-office staff, but Moss predicts these could either be for the chop or be asked to make the move to Edinburgh.

And it’s not just in the front office where cutbacks could occur. “There are various other things,” says Moss, “such as Resolution’s administration platform behind the assets, which can merge onto Standard Life’s platform, so back-office people [admin and IT] would go as a result of that.”

Other overlaps are with Resolution’s marketing consultants who bid for IFA business for its third-party asset management products. There would also be infrastructure cross-overs – accounting, actuarial and compliance departments – so further back-office cuts could occur.

One Scottish headhunter thinks any fund managers determined to stay in Glasgow could find themselves bereft of opportunities: “There aren’t many other Glasgow-based fund management companies, so they would have to go to Edinburgh or start a new career,” he says.

Indeed, Glasgow’s fund management industry seems to consist of boutiques such as Saracen Fund Management, with just £437m in assets under management. Meanwhile, Glasgow Investment Managers has recently been acquired by Aberdeen Asset Management.

The deadline for the takeover bid has been set for 25 October, with analysts predicting Standard Life/Swiss Re will have to offer at least 750p per share in order to be in with a chance of success.

Greig Paterson, an analyst at Keefe Bruyette Woods, said in The Herald: "We estimate that the partnership would need to offer a price of less than 730p in order to justify the economics. However, it is our view that an offer below the 750p to 800p range is unlikely to receive Resolution management's approval and thus would likely fail."