When Peter Harrison learned his firm, London-based Schroders PLC, would acquire crosstown equity shop Cazenove Capital, he knew which details were most important for keeping portfolio managers and clients happy: all of them.
Mr. Harrison, global head of equities at Schroders, labored to recreate the Cazenove work environment at his firm.
Even the milk delivery was scheduled for the same time — 7:15 a.m.
“People may have thought I was mad,” Mr. Harrison said. “(But) it was about every single person feeling comfortable.”
The Cazenove equities team sits in an open-plan office with Schroders' equities managers. Their desks are in the same formation as in their old office, and the portfolio team sits at the same proximity from dealers as they did in their old office. Mr. Harrison “took a lot of care on the softer issues — details such as having exactly the same IT hardware on our desks and software on computers,” said David Docherty, portfolio manager, pan-European equities, who joined Schroders from Cazenove.
The close proximity helped too. Schroders' London headquarters at Gresham Street is just a five-minute walk from Cazenove's former office.
And Schroders' informal running club quickly welcomed Cazenove's harriers.
“Aside from unloading boxes, on day one we were normal. Desk configurations were almost exactly the same as in the previous building,” Mr. Docherty said. “Also, things like facilities, access to kitchens, which sound like small issues but affect day-to-day life, were checked. Schroders left no stone unturned. Attention to detail was not excessive — it made it right,” said Mr. Docherty.
And it seems to have worked, both for equity investment staff (all of whom have stayed on through the transition) and for clients (who've helped boost Cazenove's equity assets under management by 57% — and total AUM by 25% — since joining Schroders).
Mr. Harrison's empathy for staff coming on board comes from experience. In 2000, he was chief investment officer for global equities and multiasset at Robert Flemings Holdings, which was bought by Chase Manhattan Bank. “There was a phrase that we coined about "keeping the investment engine going,'” he said.
“The Cazenove acquisition, for its staff, may have seemed like a big change, so we knew it was very important to get the culture fit right from day one,” Mr. Harrison said. “We had to give a clear message that they would carry on running money in the way that they could and had at Cazenove.”
The £424 million ($692 million) deal added £17.2 billion of assets to Schroders, which now runs £256.7 billion. It also added 350 staff, including 25 portfolio managers.
“We were doing small things: We had to make sure that everything happened right — clients also take confidence from continuity,” Mr. Harrison said.
So far, the transition appears to be a success. No Cazenove investment staffers have left, and AUM in legacy Cazenove strategies rose to £21.5 billion as of Sept. 30 from £17.2 billion at Dec. 31, 2012, when the deal was priced. n
This article originally appeared in the December 23, 2013 print issue as, "Schroders skipping no details with Cazenove".