Schroders pledged to bring down its costs as the U.K. asset manager’s new chief executive officer unveiled a raft of fresh targets in a strategy revamp.
The company is looking at £150 million ($186 million) in annualized net cost savings over the next three years, it said in a statement on March 6. The move should help Schroders lower its adjusted cost-to-income ratio to less than 70% from 75%. Bloomberg News reported in January that the firm is planning to cut about 200 jobs, or 3% of its workforce, mostly in technology roles.
Shares rallied as much as 6.7% in early London trading, the biggest intraday advance since late 2022, but pared some of those gains later with analysts at Deutsche Bank calling the targets “ambitious” but not “radical.” The stock is still down about 40% from a peak reached in September 2021.
CEO Richard Oldfield, who took over from long-time chief Peter Harrison in November, is seeking to revive Britain’s largest standalone asset manager, which has faced criticism for its relatively high cost base and slower organic growth amid wider woes facing traditional active fund managers.
“We have closed more than 10% of our funds this year and will be looking at doing more going forward,” Oldfield told Bloomberg Television in an interview. The former PwC partner didn’t rule out closing offices or selling noncore businesses.
Schroders said it plans to hold the dividend at its current level as it seeks to bring the payout ratio back toward 50%. In its strategy update, it identified four key areas, including the need to deploy capital more effectively, broaden client access to public markets and beef up its wealth management unit.
The company’s mutual funds saw net inflows of £1.3 billion in 2024, while the wealth management and private markets arms raised £6.3 billion and £10.8 billion, respectively, the company said in its annual results alongside the strategy update.
Assets under management stood at £778.7 billion at the end of December, largely unchanged from the previous quarter.
Other targets for the next three years include stabilizing revenue in its public markets business, generating cumulative net new business of £20 billion in its private markets business, and achieving net new business-rate in wealth management of 5% to 7% of opening AUM per year.
