Goldman Sachs targeting £109bn Lloyds investment fund

US bank Goldman Sachs has entered the competition to manage a £109bn investment contract put out to tender by Lloyds Banking Group.

Goldman Sachs Asset Management has reached the second round of bidding for the contract, alongside Blackrock, JPMorgan Asset Management and Schroders, Sky News reports.

The process kicked off when Lloyds pulled outs of its deal with Standard Life Aberdeen (SLA) after the merger between Standard Life and Aberdeen Asset Management.

Read more: Standard Life in scrap to keep £100bn Lloyds contract

Aberdeen had managed the contract since 2014, but Lloyds said that the merger with Standard Life made the combined company a competitor and ended the deal.

In response SLA said it had “informed Lloyds Banking Group (LBG) that it does not agree that, following the merger of Aberdeen Asset Management and Standard Life, SLA was in material competition in the UK with LBG and that, therefore, SLA does not consider that LBG, Scottish Widows or their respective affiliates has the right to terminate the asset management agreements.”

Read more: Standard Life Aberdeen plans to return £1.75bn to shareholders

It said that the two parties were now in arbitration to settle the dispute.

In response Lloyds said: “Standard Life Aberdeen is a clear and material competitor of Scottish Widows and Lloyds Banking Group in the UK and to suggest otherwise is not credible.”

It added: “We are confident of our legal position and that our actions are in the best interests of our customers, and we are therefore surprised at the course of action pursued by Standard Life Aberdeen.”

Goldman Sachs declined to comment.