Asset management firm Schroders has entered into a £9.9 billion agreement with American investment company Nuveen, marking the end of more than two centuries of independence for the UK’s largest standalone asset manager. Under the terms of the deal, Schroders shareholders will receive 612 pence per share, which includes a cash payment of 590 pence and a dividend of 22 pence. This cash offer represents a significant premium of 29 percent over the closing price of 457 pence on the day prior to the announcement.
Nuveen, the asset management division of the Teachers Insurance and Annuity Association of America, aims to create one of the largest active asset managers in the world, with combined assets under management approaching £1.8 trillion across various institutional and wealth channels. The deal will preserve the Schroders brand, with London designated as the non-US headquarters and largest office of the new entity. Completion of the transaction is anticipated in the fourth quarter of 2026.
Strategic Growth and Leadership
Richard Oldfield, Chief Executive of Schroders, expressed optimism about the merger, stating, “In a competitive landscape where scale can help deliver benefits, in Nuveen we see a partner that shares our values.” He emphasized that the partnership will create “exciting opportunities for our clients and people.” Oldfield noted that the transaction is set to accelerate Schroders’ growth plans, enhancing its geographic reach and strengthening its balance sheet.
Despite recent speculation about a potential sale, Oldfield had previously affirmed the Schroder family’s commitment to the firm. In July 2023, he stated, “No, there’s no intention of the family to sell,” asserting their long-term support for the business.
Nuveen, which currently manages approximately $1.4 trillion (£1 trillion) in assets, welcomed the acquisition, asserting that it will unlock new growth prospects for both wealth and institutional investors globally, while also expanding its international footprint. The newly formed group will maintain a presence in over 40 markets, including major financial hubs.
Challenges and Recent Performance
Schroders has faced challenges in recent years, including criticism regarding its high cost structure and slower growth in its private markets division. Over the past five years, the company’s share price has fallen by 23 percent, culminating in a market capitalization of $10 billion as of the latest closing.
However, recent results indicate a turnaround for Schroders, with a return to organic growth. More than 70 percent of client assets have outperformed those of competitors, marking the firm’s strongest performance since 2021. Assets under management rose by six percent to £823.7 billion, up from £778.7 billion the previous year. The public markets division also returned to growth, reporting net inflows of £3.7 billion, with gross inflows reaching £142 billion.
In conclusion, the acquisition by Nuveen presents both challenges and opportunities for Schroders as it transitions into a new phase under a larger corporate structure. With continued leadership from Richard Oldfield, the firm aims to leverage its enhanced capabilities to better serve its clients and navigate the evolving asset management landscape.
