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Adviser verdict: Schroders/Cazenove deal would make a natural fit


Advisers have reacted positively to news that Schroders is in talks to buy Cazenove Capital, suggesting an acquisition would offer a welcome boost the FTSE 100 asset manager.

The companies confirmed today that they are in discussion about a possible cash offer, with loan note alternative, for Schroders to acquire Cazenove. “There can be no certainty that these discussions will lead to an offer being made for Cazenove Capital,” Cazenove added.

The news comes after Schroders head of UK equities Richard Buxton made a shock resignation from the asset manager, leaving the future management of his £3.6bn Schroder UK Alpha Plus fund under question.

Cazenove’s team includes Cazenove UK Opportunities manager Julie Dean, Cazenove UK Smaller Companies manager Paul Marriage and Cazenove UK Equity Income manager Matthew Hudson. It also has a respected multi-manager team comprising Marcus Brookes, Robin McDonald and Joe Le Jehan while Chris Rice heads the firm’s European equity funds.

Chelsea financial managing director Darius McDermott says: “We thought Buxton’s news was big. Given that Schroders have had a difficult week, it would be huge news for them if it is to be completed.

“They haven’t just done this because they thought Richard Buxton was leaving. Cazenove has a very strong UK team, with Julie Dean and Paul Marriage on the small caps. It would seem from a UK equity point of view, a very natural fit. [But] it is obviously a much bigger business than just the UK equity team.”

Skerritts head of investment Andrew Merricks agrees that Cazenove would be a good fit for Schroders should the potential deal go ahead.

“It’s surprising because we haven’t seen any mergers or takeovers for a while. It has been quite quiet on that front. I think we could see more consolidation in the fund management business,” he says.

“Presumably they’ve looked both sides have looked into it and it seems like a good fit. Cazenove have a good small cap funds and good multi-management, although this isn’t anything that Schroders haven’t got already.”

Bestinvest head of communications Jason Hollands says: “It looks like quite an interesting deal for them if it does go ahead. One of the things over many years is that Schroders have come under a bit of criticism for sitting on a very large pile of cash and people wondering whether they are going to do something with that.

“What Cazenove would mean to them potentially is fairly chunky wealth management operation, that could be the most interesting part of it. Cazenove have some good funds and well regarded managers but that would all depend on if there is a fit for them within the existing business. I think it could potentially be a good fit.”


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