LGT is set to buy abrdn Capital, the discretionary fund management arm of abrdn, for £140m.

The DFM business, which has £6.1bn in asset under management and about 140 employees, will be absorbed into LGT Wealth Management. abrdn Capital delivered £40m in revenue last year and serves about 4,000 clients.

abrdn said in a statement that in order to succeed long-term in the DFM market, the business would "need to build much greater scale", which would take focus from its strategy to concentrate on personal finance.

However, abrdn's Managed Portfolio Service business, which the firm described as "better aligned to its group strategy", will be carved out and retained within the firm.

abrdn added that Evercore is acting as the firm's financial adviser for the transaction.

The sale is expected to be completed in the second half of this year and will see LGT Wealth Management's assets under management swell from about £22bn to over £28bn.

LGT Wealth Management was founded in 2008 as Vestra Wealth and acquired by LGT in 2016.

Stephen Bird, abrdn CEO, said; "We are establishing one of the UK's leading personal wealth businesses, and this deal represents an important step forward in our strategy to focus on our high-growth, platform-led, businesses.

"Our track record over the past two years shows that where we identify non-core capabilities, we will look to divest and redeploy capital in ways that better align with the interests of our investors, clients and customers.

"The decision to sell our DFM business underlines our commitment to that principle."

Ben Snee, CEO of LGT Wealth Management, added: "We see a strong strategic fit between abrdn's discretionary fund management business and LGT. There is clear similarity in ethos and approach between the two businesses, with a genuine desire to provide first-class client solutions and passion for conviction-based investing.

"We very much look forward to welcoming our new colleagues to the team and are convinced that by combining our footprint and offerings, including abrdn's proven experience in the charities sector, we're set to achieve further successful growth in the UK market."