Big news for the UK finance industry this morning, with the Schroder family selling its eponymous asset management business to Nuveen. From mainFT’s Mary McDougall:
Schroders has agreed to a £9.9bn takeover by US asset manager Nuveen in a deal that would end the independence of one of the City of London’s most historic names.
Given Alphaville’s above-average interest in the investment industry in general and the City of London in particular, we thought we’d do an annotated version of MainFT’s story, with our own hot takes on various aspects of the deal, and what it says about Schroders, Nuveen and the investment industry in general.
The group has agreed to a 612p a share offer by Nuveen, part of the Teachers Insurance and Annuity Association of America — a retirement savings group — that would create one of the world’s largest asset managers with $2.5tn of assets.
This is obviously a moving target, but judging from the last comprehensive survey published in 2025 and how markets have evolved since then, Schroveen will still be slightly smaller than Amundi and fail to crack the list of the top-10 largest investment groups in the world.
Which says a lot about just how big the big have become in asset management.
The offer comprises 590p in cash — a 29 per cent premium to Schroders’ closing share price of 456p on Wednesday — and 22p in dividends to be paid by the FTSE 100 group to its shareholders before the deal goes through. Shares rose 30 per cent to 592p in early trading on Thursday.
Depending on your perspective, this is either a surprisingly skimpy premium or a surprisingly decent one.
The controlling family didn’t have to sell — the company still threw off £674mn of pre-tax profits last year — and Schroders is a premium brand. Until very recently, it had been considered more likely to be predator than prey in the asset management industry, and has been adding various trendy bits to its core business in recent years, like renewable energy and private capital. As recently as earlier this week it announced a partnership with Apollo.
However, it’s become bogged down in what industry insiders call the “mushy middle” (Alphaville prefers the more evocative “valley of death”). It is neither a smaller, nimble boutique focused on a specific hot niche or large enough to compete with the mostly American asset management juggernauts. Being based in the UK is also arguably a disadvantage these days.
With fees under ridiculous pressure from the rise and rise of passive investing — which is now growing as quickly in Europe and the UK as it is in the US — Schroders’ halcyon days of stonking operating margins look like an artefact of yesteryear.
Given all this, a 29 per cent premium to Wednesday’s close looks decent. It’s a 53 per cent premium to Schroders’ share price a year ago, and not far from the highest it’s ever traded at, four years ago.
The two companies said Schroders’ brand would be retained and London would be its largest office.
That’s perhaps good for London. And London already punches well above its weight when it comes to assets actually managed, rather than assets managed by companies headquartered in the UK.
According to the Investment Management Association, over £12tn of assets were managed out of the UK. This compares to just $7.6tn of assets managed by top 500 companies headquartered in the country.
But combining the Schroders rectangle with the Nuveen one will shrink the pink UK area on our treemap to a size smaller not only than the green Canadian area, but also the dark red French area. Zut alors! 😱
Moreover, once under the leadership of Nuveen there’s no guarantee that the London operation will thrive. Asset management industry consolidation is notoriously difficult, and pretty much the only truly successful examples we can think of have involved complete and unapologetic takeovers.
Perhaps this will be the deal to buck the trend, and Schroders ends up on top. MassMutual did end up rebranding Babson — its substantial fixed business — as Barings.
But Alphaville is sceptical that the “multi-boutique” model actually works, and would bet that eventually the Schroders name goes the same way as Cazenove (JPMorgan), Warburg (UBS), Morgan Grenfell (Deutsche Bank), Mercury (BlackRock) and Schroders the bank (Citi).
On we go.
The deal comes just months after chief executive Richard Oldfield moved to quash speculation that the Schroder family, which has a 44 per cent holding, was looking to sell the business.
“No, there’s no intention of the family to sell,” Oldfield said in July.
There may be other examples of asset management businesses with glowing prospects, huge ambitions and zero interest in selling out that choose to promote to CEO a CFO with no previous investment industry experience. We just can’t think of any.
On Thursday, Oldfield said: “This business was not and has never been up for sale . . . This isn’t the outcome of us surreptitiously doing an auction — I don’t think I’d have been able to keep that quiet.”
It is indeed interesting that nothing about this leaked out in the infamously gossipy City. Perhaps this is because Schroders’ lead financial advisor was Wells Fargo, which is not a name you often see on M&A deal sheets.
It looks like the senior Wells banker on the deal was Doug Braunstein, who only joined it two years ago after almost two decades at JPMorgan, where he was head of global M&A and CFO, among other jobs. Looks like he’s starting to earn his keep.
[Oldfield] said Schroders had agreed the deal because it “saw a huge opportunity to create something powerful and unique” with Nuveen.
Schroders has been attempting to cut costs and boost growth. Before the takeover announcement, the 221-year-old company’s share price had dropped by more than a fifth over the past five years. Oldfield said the deal was “not about saving money” but driving growth and that Nuveen would “not be shedding heads over and ahead of what we’ve already envisaged in our transformation project”.
He said the transaction would “significantly accelerate our growth plans to create a leading public-to-private platform with enhanced geographic reach”.
It’s certainly a very big move by Nuveen, which is a very US-centric company — it was originally founded in Chicago in 1898 as an investment bank focused on selling municipal bonds before gradually branching out into the investment industry.
It eventually ended up in private equity hands, before TIAA-CREF swooped for it in 2014. TIAA started out as the Andrew Carnegie-bankrolled pension system for US professors — it stands for Teachers Insurance and Annuity Association of America — and remains a non-profit.
The virtual absence of geographic overlap and TIAA’s unusual structure certainly bodes well for nervous Schroders employees who might remember what happened to a lot of former Barclays Global Investors and Mercury people when BlackRock took those firms over.
The transaction, which will need shareholder approval, is expected to complete in the fourth quarter of 2026.
Oldfield, a former PwC accountant, has taken the knife to parts of the business since taking over in November 2024 with the group’s shares at a 10-year low. The shares had risen 19 per cent in the past 12 months before Thursday’s deal announcement. He ended a joint venture with high street bank Lloyds Banking Group to concentrate more on its wealthier customers.
Schroders has also exited sub-scale operations, including in Brazil and Indonesia. This week Schroders announced a partnership with US private equity giant Apollo to develop wealth and retirement products.
The takeover was announced as Schroders reported its pre-tax profits rose 21 per cent to £674mn in 2025.
This is important to remember amid all the headlines about the asset management industry’s troubles. Despite all the pressures and murky outlook, for the most part it remains a phenomenally profitable business.
This is why people like Nelson Peltz and some private equity firms still like the traditional asset management industry. Or rather, at least find it financially interesting.
Sure, the competition from cheap passive funds on one side and expensive private capital on the other is intense, but money tends to be stickier than many people assume. Even severely underperforming funds can often totter on for years and years.
Meanwhile, buoyant markets can mask a lot of outflows. This is why the headline assets under management figures and profits of most asset managers have continued to climb, despite monstrous outflows of their active strategies over the past two decades.
Still, you’d rather be trapped on a melting iceberg than a sheet of ice, which is why the asset management industry is so aggressively bulking up these days.
After all, the fee pressures are even more intense in the US investment industry than they are in Europe — as the Investment Company Institute detailed in its last factbook — which explains why Nuveen is also looking to get even bigger.
OK we’re in the final stretch here, but the FT’s news story raised an interesting point we also wanted to address:
Oldfield has been an advocate for London’s stock market and last year warned against calling the “death” of London equities, arguing that listed companies were vital for transparency and holding management to account.
On Thursday, as he announced the deal that would see Schroders leave the public markets, he said: “We can obsess about the listing, but what is absolutely undiminished is our commitment to supporting and driving the UK capital markets.”
Does this matter? Really?
Alphaville’s feeling has long been that the paucity of London listings is at worst a symptom of the UK’s post-2008 economic malaise, rather than a cause, and actually doesn’t necessarily matter much to the City’s health. Or at least nearly as much as all the attention the subject receives might indicate.
People seem to forget that London’s 19th- and 20th-century heydays were built on bonds, not stocks. Nor did the 1980s-onward American/German/Swiss invasion dent the City’s status as a global financial centre. In fact, it helped entrench it.
Still, for those of us who like having at least a few of the good old names around, it’s obviously not great news to see Schroders selling itself.