When Schroders CEO Richard Oldfield presents the overhaul of the 221-year-old British fund manager next week, one particular group of investors will be especially attentive: the founding family.
Expected to introduce cost-saving measures and prioritize growth areas like wealth and private markets, Oldfield, who took the reins in November, aims to boost performance following a series of disappointing earnings, as revealed by sources close to the firm.
Members of the influential Schroder family have urged executives to expedite improvements after a difficult period that saw Schroders' stock drop by 25% last year, continuing a three-year decline, which sent share prices back to 2020 levels.
Oldfield, who became the finance director at Schroders in 2023, enjoys the board's support and will be given the opportunity to execute his strategies, as disclosed by insiders.
With Schroders' shares increasing by 15% this year ahead of the review, the company declined to provide comments.
The Schroder family, holding a substantial 44% stake and two board seats, including Leonie Schroder, daughter of the late Bruno Schroder who led the company for 56 years, wields significant influence.
The board is grappling with an evolving industry and pressing executives about the company's future direction, according to sources.
As industry giants like BlackRock, Vanguard, and Amundi attract assets through low-cost funds, mid-sized firms like Schroders are losing clients, raising concerns about their long-term competitiveness.
Despite focusing on actively managed stocks and bonds, Schroders has expanded its presence in areas with higher fee potential, such as wealth and private markets, through strategic acquisitions like wealth manager Cazenove in 2013 and infrastructure investor Greencoat in 2021.
With wealth assets under management growing by over two-thirds since 2020 to 121.3 billion pounds, Schroders continues the legacy of its founders, who initially financed transatlantic trade before delving into corporate finance and managing investments for the affluent.
While the family's historical ownership has provided stability, and shielded management from the often frantic pace at publicly traded companies, pressures on asset management may force Schroders to consider more radical changes, suggested David McCann, an analyst at Deutsche Numis.
While Oldfield has already made significant staff cuts and expressed the need for advancement, any major recalibration may not occur immediately. Schroders is likely to face scrutiny from Tikehau Capital, one of its top shareholders, about potential commercial partnerships, especially in private markets.
In an industry undergoing rapid changes, analysts emphasize the importance of rejuvenating growth in private assets and wealth management to restore investor trust and earnings expectations at Schroders.