Schroders’ wealth division is examining possible acquisitions while maintaining that it remains committed to the UK, reported the Financial Times.
The group’s board has “agreed to a material investment in the wealth business over the next five years, to help us transform and grow”, said Oliver Gregson.
Gregson, who took charge of the wealth management unit at the end of last year, said the business is being redirected towards very affluent clients.
He said acquisitions may support that strategy, which centres on financial planning and the management of high-net-worth assets to increase fee income.
His remarks follow shareholder approval for Schroders’ £9.9bn ($13.5bn) sale to Nuveen, a transaction that will create an asset manager with roughly $2.5tn under management and result in another company leaving the FTSE 100.
“As we think about our growth ambitions, supported by the board of Nuveen, it would be remiss of me not to be thoughtful and considerate about inorganic opportunities,” Gregson said in his first interview since he started at Schroders.
“Absolutely there are things that I spend a lot of time thinking about in the traditional M&A sense.”
Any deal would be intended to expand the group’s position in the high-net-worth segment in the UK and overseas, as it scales back its exposure to the mass-affluent market, covering people with hundreds of thousands of pounds to invest rather than millions.
Before the Nuveen sale, Schroders chief executive Richard Oldfield had already been reducing non-core operations and had also overseen the end of the company’s joint venture with Lloyds Banking Group, Schroders Personal Wealth, which managed about £17bn in assets at the time.
Those steps, alongside the sale to Nuveen, led to questions about the future of Cazenove Capital.
According to sources, an arrangement tied to the sale means the Cazenove brand licence will continue in perpetuity.
They said JPMorgan Chase retains the right to withdraw the brand following a change of control.
The wealth business had once formed part of one of Britain’s long-established stockbrokers before Cazenove was sold to JPMorgan Chase in a two-stage transaction beginning in 2004.
Cazenove Capital, the fund management business, was separated into an independent company and later bought by Schroders in 2013.
Gregson said Schroders and Nuveen had made clear in recent public statements that the enlarged group is “retaining Cazenove Capital” and intends to expand it.
“It’s not for sale,” he said.
“We will continue to invest in Cazenove Capital in the UK and Schroders Wealth International,” Gregson added.
As part of its withdrawal from the mass market, Schroders agreed to sell Benchmark, its financial planning unit, for more than £200m to Söderberg & Partners.
