Schroders wealth unit weighs acquisitions to expand high-net-worth business

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Schroders wealth expansion

Highlights

Schroders' wealth division will receive material investment over the next five years to support expansion targeting high-net-worth clients, with acquisitions under consideration.
Schroders has exited the mass-affluent segment by ending its £17bn joint venture with Lloyds and selling its £40bn Benchmark arm for over £200mn to Söderberg & Partners.
Cazenove Capital will remain within Schroders and is not for sale despite persistent speculation, with analysts valuing the unit at up to £2.4bn.

Growth plan targets affluent clients

As first reported by the Financial Times, Oliver Gregson, chief executive of Schroders' wealth division, says the board has agreed a material investment in the business over the next five years to support its transformation and expansion.

Gregson, who joined at the end of last year, says he wants to refocus the division on very affluent clients and is considering acquisitions as part of that push. He says inorganic opportunities could help the group build its domestic and international position in high-net-worth wealth management, where fee income is typically higher.

The shift follows Schroders' wider retrenchment from the mass-affluent segment. The group has already ended its joint venture with Lloyds Banking Group, Schroders Personal Wealth, which managed about £17bn of assets at the time, and has also agreed to sell its £40bn financial planning arm Benchmark to Söderberg & Partners for more than £200mn.

Cazenove retained as UK wealth platform

Gregson says Schroders and Nuveen have made clear in recent public announcements that the enlarged group is retaining Cazenove Capital and plans to grow it. He adds that the business is not for sale and that Schroders will continue to invest in both Cazenove Capital in the UK and Schroders Wealth International.

Questions over Cazenove's future have persisted since Schroders agreed to the Nuveen takeover, which creates an asset manager with about $2.5tn under management. People familiar with the situation say the Cazenove brand licence will continue in perpetuity under the sale agreement, although JPMorgan Chase retains the right to revoke the brand on a change of control.

Analysts at Deutsche Numis estimate Cazenove Capital could be worth up to £2.4bn and say it may appeal to UK banks or rival wealth managers seeking greater exposure to high-net-worth clients. Critics argue Schroders is left with a midsized UK wealth operation facing global competitors such as Goldman Sachs, JPMorgan and UBS, adding to expectations that domestic consolidation and technology investment will shape the next stage of growth.

UK tax changes are prompting more high-net-worth individuals to reconsider their residency plans, with advisers reporting growing concern about policy unpredictability and the end of the non-dom regime. We previously reported that figures in London’s finance community have been watching relocations such as hedge fund founder Chris Rokos’s move to Greece as a sign of potential wealth outflows, while inheritance tax rules and wider fiscal tightening complicate long-term planning for wealthy families and business owners.

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