Schroders Explores Partnerships to Accelerate Private Capital Growth

Schroders' Strategy for Private Capital Expansion

By Amy-Jo Crowley and Iain Withers

Potential Partnerships and Collaborations

LONDON, Jan 29 (Reuters) - Schroders has held high-level talks about potential tie-ups to speed up the growth of its private capital business, three people familiar with the matter told Reuters, as the 222-year-old British asset manager seeks to gain scale.

Recent Developments in Private Markets

Schroders has discussed potential deals for Schroders Capital with French investment firm Wendel, two of the sources said, and London-listed Bridgepoint Group, one added.

Financial Performance and Future Goals

The talks, which took place some months ago and have not previously been reported, have since stalled, the sources said. Reuters could not immediately determine the reason for this.

Asset managers globally have been vying to expand into private markets, particularly credit and infrastructure, where they can typically charge clients higher fees, in response to competition squeezing margins in stocks and bonds.

Deutsche Numis analysts earlier this month estimated the value of Schroders Capital, which is part of Schroders' asset management business, at about 800 million pounds.

Schroders has made private market growth a priority under CEO Richard Oldfield, who has set Schroders Capital a target of adding 20 billion pounds ($28 billion) of net new business over three years to the end of 2027.

In a trading update earlier this month, it said Schroders Capital had attracted 4.5 billion pounds in the first year.

Schroders Capital has also explored potential tie-ups with insurers, a third source said. The three people spoke on condition of anonymity because the matter was private.

"We are in regular dialogue with advisers and industry peers about partnerships whereby we can explore new and innovative ways to expand our client proposition, find new distribution channels, leverage additional capabilities and grow our business," Schroders said in an emailed statement.

A spokesperson for Bridgepoint declined to comment, while Wendel said it does not comment on market rumours.

OPEN TO PARTNERSHIPS TO PLUG GAPS

Schroders launched a 50:50 joint venture in private markets with British insurer Phoenix in 2024 with the aim of channelling up to 20 billion pounds into unlisted assets over a decade, while the asset management sector has seen a spate of deals.

Swedish private equity firm EQT last week announced the acquisition of British investment firm Coller Capital for $3.2 billion, while BlackRock's purchases have included private credit provider HPS and infrastructure investor Global Infrastructure Partners.

Others have opted for partnerships, such as Britain's Legal & General, which entered a private credit tie-up with Blackstone last year. 

Oldfield has previously said Schroders is open to striking partnerships to plug gaps, including in private credit.

Reuters reported in December that a potential sale was among the possibilities being considered separately for its financial planning business Benchmark Capital.

Schroders cheered investors with a profit upgrade earlier this month and said it brought in 11 billion pounds of net new business last year as Oldfield's turnaround begins to deliver.

($1 = 0.7254 pounds) 

(Reporting by Amy-Jo Crowley and Iain Withers in London; Additional reporting by Elisa Martinuzzi and Mathieu Rosemain; Editing by Anousha Sakoui and Alexander Smith)