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UK's biggest asset manager strikes $2.9bn to push into ultra wealthy market

Kumutha Ramanathan
·2-min read
London traffic passing the financial area of London and offices of Schroder’s PLC. A British multinational asset management company
Schroder's office in City of London. Photo: Getty

The UK’s largest stand-alone asset manager Schroders (SDR.L) has announced that it has acquired London-based family office specialist Sandaire at an undisclosed price as part of its overall strategy to grow its wealth management business, according to a company statement released on Friday.

Schroders stock has seen modest gains this week, peaking on Friday following news of the deal, up 0.50% at 1.30pm UK time. Though the stock has been on a downward trend for the past month as a whole.

Sandaire, which manages £2.2bn ($2.9bn), will join Schroders’ Cazenove Capital wealth management division. It is responsible for £35.6bn of client assets and is one of the largest UK advisers to wealthy families and endowments.

“This acquisition will create one of the UK’s top multi-family offices and be a springboard for developing an exceptional global service,” said Peter Hall, global head of wealth management at Schroders, in the statement.

The stock has been gaining following news of the acquisition, but has seen session lows for the month.
The stock has been gaining following news of the acquisition, but has seen session lows for the month. Graph: Yahoo Finance

Schroders’ wealth management business has been one of the key drivers of new business inflows and profits for the FTSE 100 (^FTSE) group, particularly at a time when mutual funds and institutional client businesses have been struggling to retain and drive growth. The global COVID-19 pandemic has exacerbated this trend.

The company’s chief executive officer Peter Harrison has been actively growing the lucrative wealth management arm of the business.

He sees an opportunity for growth with an aging UK population and increased pension freedoms, according to Bloomberg. Last year, Schroders launched a joint venture with Lloyds Banking Group Plc for affluent customers called Schroders Personal Wealth.

Schroders had also acquired Thirdrock, a £1.7bn Singapore-based wealth manager, last year as part of a push to build up its private client business in Asia.

Hall said the Sandaire deal would provide Schroders with “a springboard” to further develop in Asia.

Friday’s transaction is subject to regulatory approval, according to the company statement.