UK fund managers name new CEOs to reboot their fortunes
Schroders and abrdn appoint insiders against a backdrop of skittish investor sentiment
10 September 2024 - 15:14
bySinead Cruise
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People stand at Greenwich Park, with the Canary Wharf financial district in the distance, in London, Britain. Picture: KEVIN COOMBS/REUTERS
London — UK fund managers Schroders and abrdn named new CEOs on Tuesday, appointing insiders to reboot performance at firms running nearly £1.3-trillion in assets against a backdrop of skittish investor sentiment and industrywide pressure on fees.
Schroders appointed current CFO Richard Oldfield to succeed Peter Harrison in November, while abrdn — which had faced calls to break up amid shrinking demand for its funds — separately announced interim boss and former CFO Jason Windsor would become its permanent CEO.
Both take over at a testing time for the asset management industry. Mid-sized British firms like Schroders and abrdn focused on active funds have been particularly squeezed by competition from cheaper index-tracking products sold by giants such as BlackRock and State Street Global Advisors, as well as inflationary pressures on costs.
Analysts say these structural forces are largely out of any CEO’s control.
The promotions were described as unanimous choices by the asset managers’ chairs.
Shares in Schroders, a 224-year old fund firm that built its business on transatlantic trade, have tumbled 21% in 2024 and were little changed on Tuesday. Abrdn’s stockwas barely changed, with year-to-date losses at about 16%.
Harrison announced his plan to retire in April after eight years in the top role at Schroders, prompting the largest UK stand-alone fund manager, which manages £774bn of assets, to hunt for a successor. Oldfield, 53, a seasoned finance veteran, joined Schroders last October as its finance chief from PwC, where he spent three decades in senior roles.
Underwhelming half-year earnings from Schroders in August underscored the challenge after the company missed profit forecasts and flagged pressure on its margins.
The firm started out financing trade between America and Europe, railways, ports and power stations and today is focused on managing money for pension funds, wealthy families and rich entrepreneurs. But even the richest of investors are now looking to pay less for investment services.
Senior equity analyst at CFRA Research Firdaus Ibrahim said Schroders’ problems were significant, but a decline in interest rates offered some hope if they encouraged investors to look for higher-return products. The new CEO should position Schroders “to take advantage when the tide finally turns” by prioritising cost-saving plans, improving its products and considering mergers & acquisitions, he told Reuters.
In the run-up to Tuesday’s announcement, Schroders had been linked with a variety of external candidates by media reports, including former UBS chief Ralph Hamers.
Windsor took on the role of abrdn’s interim CEO in May, after predecessor Stephen Bird abruptly stepped down from a firm with £506bn of assets under management and administration.
Born from a merger of Aberdeen Asset Management and Standard Life in 2017, abrdn has come under particular strain in recent years, reporting more than £10bn of outflows over each of the past two years, though this year it beat performance forecasts and has been axing costs.
Since the merger was announced, abrdn shares have lost more than half their value. Analysts have previously said that a change in leadership at abrdn could reignite calls for a break-up of the company, which spans traditional fund management through to retail investing platform interactive investor.
Windsor has a background in deal making, having spent 15 years at Morgan Stanley, though he told reporters in August that strategic repositioning of the group was not a high priority.
Windsor “has made a huge impression both internally and externally since he joined abrdn, particularly as someone whose actions evidence he cares deeply about our clients and customers and our people”, abrdn chair Douglas Flint said in a statement.
Ian Jenkins would continue in the role of abrdn’s interim group CFO and a search for a permanent appointment to this role would now begin, the company said.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
UK fund managers name new CEOs to reboot their fortunes
Schroders and abrdn appoint insiders against a backdrop of skittish investor sentiment
London — UK fund managers Schroders and abrdn named new CEOs on Tuesday, appointing insiders to reboot performance at firms running nearly £1.3-trillion in assets against a backdrop of skittish investor sentiment and industrywide pressure on fees.
Schroders appointed current CFO Richard Oldfield to succeed Peter Harrison in November, while abrdn — which had faced calls to break up amid shrinking demand for its funds — separately announced interim boss and former CFO Jason Windsor would become its permanent CEO.
Both take over at a testing time for the asset management industry. Mid-sized British firms like Schroders and abrdn focused on active funds have been particularly squeezed by competition from cheaper index-tracking products sold by giants such as BlackRock and State Street Global Advisors, as well as inflationary pressures on costs.
Analysts say these structural forces are largely out of any CEO’s control.
The promotions were described as unanimous choices by the asset managers’ chairs.
Shares in Schroders, a 224-year old fund firm that built its business on transatlantic trade, have tumbled 21% in 2024 and were little changed on Tuesday. Abrdn’s stockwas barely changed, with year-to-date losses at about 16%.
Harrison announced his plan to retire in April after eight years in the top role at Schroders, prompting the largest UK stand-alone fund manager, which manages £774bn of assets, to hunt for a successor. Oldfield, 53, a seasoned finance veteran, joined Schroders last October as its finance chief from PwC, where he spent three decades in senior roles.
Underwhelming half-year earnings from Schroders in August underscored the challenge after the company missed profit forecasts and flagged pressure on its margins.
The firm started out financing trade between America and Europe, railways, ports and power stations and today is focused on managing money for pension funds, wealthy families and rich entrepreneurs. But even the richest of investors are now looking to pay less for investment services.
Senior equity analyst at CFRA Research Firdaus Ibrahim said Schroders’ problems were significant, but a decline in interest rates offered some hope if they encouraged investors to look for higher-return products. The new CEO should position Schroders “to take advantage when the tide finally turns” by prioritising cost-saving plans, improving its products and considering mergers & acquisitions, he told Reuters.
In the run-up to Tuesday’s announcement, Schroders had been linked with a variety of external candidates by media reports, including former UBS chief Ralph Hamers.
Windsor took on the role of abrdn’s interim CEO in May, after predecessor Stephen Bird abruptly stepped down from a firm with £506bn of assets under management and administration.
Born from a merger of Aberdeen Asset Management and Standard Life in 2017, abrdn has come under particular strain in recent years, reporting more than £10bn of outflows over each of the past two years, though this year it beat performance forecasts and has been axing costs.
Since the merger was announced, abrdn shares have lost more than half their value. Analysts have previously said that a change in leadership at abrdn could reignite calls for a break-up of the company, which spans traditional fund management through to retail investing platform interactive investor.
Windsor has a background in deal making, having spent 15 years at Morgan Stanley, though he told reporters in August that strategic repositioning of the group was not a high priority.
Windsor “has made a huge impression both internally and externally since he joined abrdn, particularly as someone whose actions evidence he cares deeply about our clients and customers and our people”, abrdn chair Douglas Flint said in a statement.
Ian Jenkins would continue in the role of abrdn’s interim group CFO and a search for a permanent appointment to this role would now begin, the company said.
Reuters
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