City stunned by Nuveen’s £10bn swoop on Schroders
City analysts were stunned by Thursday morning’s announcement that Schroders has entered into a surprise £9.9bn deal with Nuveen, which holds $1.4 trillion in assets, after speculation of a sale was rebuffed in July.
Schroders Group CEO Richard Oldfield squashed rumours that the Schroder family, who control almost half of the company’s shares, were eyeing a sale of one of the oldest financial institutions in London.
Under the terms of the newly announced agreement, which will bring to an end nearly two centuries of independence, Schroders’ shareholders will receive 612 pence per share, including a cash consideration of 590 pence and a dividend of 22 pence per share.
The acquisition is set to create one of the world’s largest active asset managers, with nearly £1.8 trillion in assets under management across institutional and wealth channels.
William Huffman, Nuveen’s CEO, said: “This transaction is about unlocking new growth opportunities for wealth and institutional investors around the world by giving our leading, differentiated public-to-private platform a broader global presence.”
Oldfield said: “In a competitive landscape where scale can help deliver benefits, in Nuveen we see a partner that shares our values, respects the culture we have built and will create exciting opportunities for our clients and people.”
Fresh blow to London equity market?
The takeover is also expected to solidify a cash payout for Leonie Schroder, daughter of the late Bruno Schroder, who passed away in 2019.
Schroder and various charities are thought to be the main beneficiaries of the “principal shareholder group” who own a 42 per cent stake and will receive almost £4.2bn in cash.
While the company confirmed Schroders will retain its brand and its London offices to serve as the group’s non-US headquarters and largest office, for unhappy shareholders and industry figures the move points towards a slow demise of London’s equity market.
Dan Coatsworth, head of markets at AJ Bell, said: “Ding-dong, the takeover bell is rung once again as London stands to lose a veteran of the UK stock market.
“It is the second FTSE 100 member to receive a takeover bid so far in 2026… and there may be grumbles from shareholders the takeout price is not generous.
“Unfortunately for disgruntled shareholders, there’s not a lot they can do in this situation.”
Schroder’s share price rocketed 28.6 per cent in morning to 588.5 pence, pulling the group out of the hole many wealth management firms found themselves in on Wednesday, after the launch of a new AI tool sent investors running for the hills.
The move also marks the second deal for Schroders in the past year, after Lloyds Banking Group acquired the remaining 49.9 per cent of its personal wealth arm in July, completing its full acquisition of the business.
Swallowing up UK potential
Over the last few years, a number of listed UK companies have been snapped up by US asset managers, who are “sniffing out untapped potential.”
Analysts have long been advocating the potential of London listed financial services firms, deeming them a powerhouse, as they are known for supplying steady, long term dividends, deep capital pools and global connections.
Asset manager Petershill Partners was reabsorbed by Goldman Sachs after it became frustrated at the persistent UK discount, as the share price traded 40 per cent below the value of its underlying assets.
Susannah Streeter, chief investment strategist at Wealth Club, noted that while the acquisition of Schroders and its decision to remain in the capital “adds shine” to the City’s reputation it could spell bad news for the FTSE.
She said: “With yet another big name turning private, it will be a blow to the London Stock Exchange.
“With global whales swallowing big fish in the UK pond, it limits the availability of listed assets for funds. This is partly why private market opportunities are increasingly attractive, given that opportunities to invest in listed companies are declining.”
Other City figures have pinned the acquisition on a lack of support for the domestic market, leading companies to look elsewhere, after a prolonged IPO drought and reduced investment.
Efforts are underway to boost London’s appeal, including encouraging pension funds to invest in domestic shares, enacting a three year stamp duty holiday for new shares, and urging retail investors to enter the market.
The new asset management titan?
However, not everyone sees Schroders leaving the exchange under a dark cloud, with some hailing the deal a “natural fit”.
Darius McDermott, managing director at Fundcalibre and Chelsea Financial Services, said: “Mega-mergers in asset management often bring a period of disruption as investment processes, teams and cultures are integrated.
However, this tie-up appears to represent a genuine natural fit. “
McDermott noted that Nuveen’s “strong presence in the US”, and Schroders’ “impressive franchise” across Europe, EMEA and Asia-Pacific makes the deal complementary, with the group to have a presence in 40 markets, including leading financial centres.
He said: “While this marks the end of the dynastic family ownership model, it signals emergence of a formidable new global active management titan.”