The new company will be called Threadneedle Asset Management and will look after pounds 30bn.
The move is an example of the increased co-operation that BAT wants to see between its two UK insurance businesses. George Greener, the former Allied Dunbar chief executive, took over as head of the UK financial businesses last May to facilitate this process.
Mr Greener will chair Threadneedle, with Kenneth Inglis, currently chairman of Allied Dunbar Asset Management, as his chief executive. Roger Townsend, a director of Eagle Star Life, will be managing director, operations.
Mr Greener hopes to keep redundancies among the combined 300 staff to a 'very modest' number. 'Clearly we are going to do some streamlining,' he said. 'But we feel very confident that, with very few exceptions, we will be able to retain and redeploy our people.'
Threadneedle's 60 investment managers will move into Eagle Star's offices in St Mary Axe in the City. The 70 Eagle Star staff involved in property management will move into Allied Dunbar's Sackville Street offices in the West End. The back-office staff are largely based at the Allied Dunbar and Eagle Star head offices in Swindon and Cheltenham.
Allied Dunbar and Eagle Star each manage about pounds 15bn. Threadneedle will continue to manage the 70 Allied Dunbar funds and the 170 Eagle Star funds separately, at least initially.
Mr Greener said this would mean customers would not see any difference in the way their money was invested.
Mr Greener said BAT might go on to consider the merger of the underlying funds, but this was 'one or two years away'.
He said BAT wanted to keep Allied Dunbar and Eagle Star as distinct brands, as they operated in different parts of the life and savings markets. But BAT may consider combining the two companies' computer services and administrative functions.
Mr Greener said Allied Dunbar had a strong research department, while Eagle Star had more experience of derivatives and international business. He wants to improve the quality of product development and of the research that underpins asset allocations.Reuse content