rtr220n7.jpgLloyds TSB’s acquisition of HBOS will give it a supersized asset management arm with over 200 billion pounds in assets, but this new funds powerhouse will nevertheless be born somewhat inadvertently.

The combination of Lloyds’ SWIP and HBOS’s Insight will be the biggest active manager – i.e. funds that try to beat markets rather than just match them – in the UK.

Its access to Lloyds and HBOS’s huge branch network will give the funds unit a commanding position in distribution and a big slice of sales to ordinary investors.

Yet whatever the merits of the deal, it is nevertheless a deal done quickly, following the collapse in HBOS’s share price amid fears the bank was struggling to raise funds in the wholesale market.

Few in the City saw the deal coming, least of all Insight.

On its website it tells clients of its “solid foundations provided by the parentage of the HBOS Group”.