Schroders, the £717bn UK listed asset manager, has struck a deal to acquire the £42bn solutions business of River & Mercantile — the latest in a string of M&A transactions announced in the sector this year.
The London headquartered firm will pay around £230m for the division, which includes its fiduciary management and derivatives businesses.
The deal, which is due to complete in the first quarter of 2022, will likely provide a boost to AssetCo — the deals company set up by former Standard Life Aberdeen co-chief executive Martin Gilbert.
In February AssetCo doubled its stake in River & Mercantile, bringing its total holding in the business to almost 6%. Gilbert sits on the board of River & Mercantile as its deputy chair.
James Barham, chief executive of River & Mercantile, will join Schroders to continue to lead the R&M solutions division. River & Mercantile clients will have access to Schroders’ investment capabilities.
Alex Hoctor-Duncan, who joined River & Mercantile earlier this year as an executive director on the board, will succeed Barham as CEO once the deal completes. Hoctor-Duncan was previously global head of Aberdeen Standard Investments.
Peter Harrison, CEO of Schroders, said: “This acquisition further enhances our ability to meet the increasingly complex needs of pension fund clients and is consistent with our growth strategy. The business brings with it a well-respected team, with a strong track record of success and is a good cultural fit with Schroders. We see significant opportunities from this partnership.”
It is the latest in a series of deals for Schroders, which has made several bolt-on acquisitions.
Last year Schroders acquired London-based family office Sandaire as part of its wider push into the wealth management arena. Sandaire, which oversaw £2.2bn in assets, became part of Schroders’ existing wealth management business, Cazenove Capital.
Other deals completed in recent years include snapping up Adveq’s private asset business in 2018, and taking a majority stake in impact investment manager BlueOrchard in 2019.
In July, Harrison told Financial News that he would not be prepared to compromise on culture in order to strike a transformative fund management deal. His comments came after Schroders ditched plans to merge with fellow UK-listed rival M&G.
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