The decision by long-established British fund manager Schroders to accept an offer from U.S. asset manager Nuveen marks a significant moment for Europe’s fragmented asset management industry. Executives said the deal, which includes the Schroder family selling its roughly 42% holding, highlights a clear strategic dilemma for many mid-sized European firms - grow through scale or consider selling to stronger, better-capitalised rivals.
Schroders, which traces its roots back more than two centuries, had long been regarded as difficult to acquire because of the founding family’s sizeable stake. In the end the family elected to monetise that holding, a move company executives described as driven by the need to secure a more substantial U.S. presence for long-term competitiveness.
Scale and product mix
The combined Schroders-Nuveen group will manage approximately $2.5 trillion in active assets. Even so, the new group will still be smaller than the several largest U.S. asset managers - led by BlackRock and Vanguard - and will lag France’s Amundi in scale. Company leadership framed the deal as a way to create a stronger platform to compete globally.
Richard Oldfield, Schroders’ CEO, characterised the tie-up as transformative, saying after the announcement that he would like to "say this is parking a very large tank on everyone’s lawn" and that he believed the merged business would be a "powerhouse." Company officials, analysts and bankers widely expect further consolidation in Europe as firms respond to mounting competitive pressures from U.S. peers that sell low-cost passive products and are now pushing into higher-fee private markets.
Where buyers are likely to come from
Analysts and market participants expect the most likely buyers to be U.S. houses with significant financial firepower. Independent, stock-picking European managers that grew in an earlier era - when star fund managers attracted assets under management - are seen as especially vulnerable to acquisition pressure.
Morningstar analysts pointed to several potential targets on the London market and elsewhere that they view as relatively inexpensive on a market-value basis. Names mentioned include Jupiter and Liontrust in London, GAM, as well as France’s Comgest and Germany’s Berenberg. An index tracking the largest U.S. asset managers has risen by about 40% over the past five years, which has outperformed some major European peers such as Amundi and Aberdeen; however, a few European firms, including DWS, have shown recent improvement.
All-European deals and execution risks
All-European combinations remain a possibility, particularly when transactions are backed by larger banking groups. For instance, BNP Paribas completed the purchase of AXA’s fund business last year. Yet the record on cross-border or domestic combinations is mixed. Past combinations, such as the merger between Aberdeen Asset Management and Standard Life, have not always delivered shareholder returns - Aberdeen and Standard Life's share performance since the 2017 deal has been weak, with shares around half their earlier value.
Several potential tie-ups have stalled or broken down in recent years. Planned combinations - including a proposed arrangement between Italy’s Generali and France’s Natixis, and early-stage talks between Amundi and Allianz Global Investors - did not proceed to completion. Consultancy Oliver Wyman has projected an acceleration of deals in the sector over the next four to five years, forecasting up to 1,500 mergers or acquisitions involving firms that have at least 1 billion euros in assets, while also warning about execution challenges.
Oliver Wyman partner Giambattista Taglioni noted that asset managers often command acquisition premiums and that realizing cost savings can prove difficult in a business where people are central, creating a risk of losing both talent and clients.
Implications for London
The sale of one of the City of London’s most recognisable finance houses brings renewed attention to a wider trend of corporate exits from London to other financial centres following foreign takeovers. Company executives said Schroders accelerated talks in recent weeks and engaged with the British government before publicly announcing the deal.
Schroders’ leadership argued the combined entity would be better placed to invest in the UK and rejected the notion the deal was a blow to London’s financial hub. Still, the transaction will remove another company from the FTSE 100 following a foreign acquisition, and it raises questions about national economic symbolism even if the board and management stress ongoing commitments.
Informal discussions between Schroders’ CEO and Nuveen’s CEO reportedly began several months before the transaction was tabled. Nuveen made its offer in January. Two people familiar with the matter said Schroders sought assurances the combined group would remain committed to the UK, and that Nuveen’s commitment played a central role in securing the founding family’s support.
The Schroder family, which retains two seats on the board and was advised by investment bank Lazard, agreed to sell its 42% stake under the terms presented. Schroders’ CEO said the family was not offered the option to hold a stake under Nuveen’s proposal. Under the agreement some continuity will remain - the Schroders name will be retained for now and one family member will continue to work in the London office. As a small, humanising detail, leadership noted the staff café will keep its informal association with the family - the café is named after Bruno, a family member who was the great-great grandson of a company co-founder and who died in 2019.
Looking ahead
Market participants and advisers anticipate further consolidation across European asset management as firms seek scale, US distribution, or complementary product offerings to defend margins and client relationships in a business increasingly shaped by low-cost passive competition and private markets expansion. The Schroders-Nuveen deal will likely be watched closely as both a practical template for combining capabilities and a test of the risks associated with integrating people-driven businesses.
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