United States asset manager Nuveen plans to buy United Kingdom-listed fund manager Schroders for £9.9 billion ($13.5 billion) in a move that would create a global asset management titan.
The combined group would have assets under management of nearly $2.5 trillion. The two companies manage a giant portfolio of real estate globally.
The companies have capabilities across equities, fixed income, multi-asset, infrastructure, private capital, real estate and other capital, which together with the wealth management business, would provide more ways to build resilient portfolios through a single platform, the duo said.
Founded in 1804, 64% of Schroders' assets under management are in Europe, the Middle East and Africa. The real estate element of Schroders Capital, which is the Schroders business focused on private markets, including private equity, renewable infrastructure investing, private debt and credit alternatives and real estate, has €33 billion of assets under management covering more than 1,100 properties with 260 real estate professionals. The global head of real estate is Nick Montgomery.
Founded in 1898, 94% of Nuveen's assets under management are in the Americas. Nuveen Real Estate is one of the world's largest investment managers, with $139 billion of assets under management through September. It manages a suite of funds and mandates, across public and private investments, spanning both debt and equity. It has more than 755 real estate employees located across 30-plus cities throughout the United States, Europe and Asia-Pacific. The global chief executive officer for real assets is Mike Sales.
Nuveen's parent company is TIAA, one of the world’s largest institutional investors. The offer is being made through private equity firm Pantheon, a wholly owned subsidiary of Nuveen.
In a statement, the groups said United Kingdom-listed fund manager Schroders' shareholders will receive 590 pence per share in cash each, plus permitted dividends of up to 22 pence. Schroders' share price at the close of on Wednesday was 456 pence per share, meaning the acquisition represented a premium of around 29%.
Schroders' stock was up 28.34% to 586.50p per share on the news by 9:37am London time, giving it a stock market value of £9.45 billion.
Schroders CEO Richard Oldfield will continue to lead the group, with London acting as the combined group's non-United States headquarters. Schroders is based at 1 London Wall Place.
The duo said the combined group will operate with significant scale and capabilities in the world's largest financial centres with a presence in more than 40 markets in total.
"By bringing our complementary platforms, capabilities, distribution networks, and cultures together, we will create an extraordinary opportunity to enhance the way we serve our collective clients through access to new markets, bolstered product offerings, and deeper pools of investment talent," said William Huffman, chief executive. "This transaction is about unlocking new growth opportunities for wealth and institutional investors around the world by giving our leading, differentiated public-to-private platform a broader global presence."
Richard Oldfield, group chief executive, Schroders, said: "The transaction will significantly accelerate our growth plans to create a leading public-to-private platform with enhanced geographic reach and a strengthened balance sheet. Together, we can create an exceptional opportunity to provide clients with a true breadth of high-quality solutions to meet their evolving needs."
It is expected that for at least 12 months following the completion of the transaction, the Schroders group will continue to operate as a standalone business within the Nuveen group.
The transaction has been unanimously approved by the boards of directors of Nuveen and Schroders, while the latter's board is unanimously recommending its shareholders approve the transaction.
The transaction is expected to become effective and close during the fourth quarter 2026, subject to conditions, including the approval by Schroders shareholders and relevant antitrust and regulatory authorities.
BNP Paribas is acting as financial adviser to Nuveen, with Clifford Chance acting as legal advisor to Nuveen.
Schroders started life as a London merchant bank opened by Hamburg financier Johann Schroder. It listed on the London Stock Exchange in 1959 and sold its investment banking arm in 2000 to focus on asset management. The Schroder family has retained a major interest in the business with the stake at present understood to be around 44%.
In recent times it has been the focus of interest from bidders as its share price has fallen. Last year Schroders announced a £150 million cost-cutting drive.
(Updated on Thursday to add more recent AUM and staff numbers, plus share price movements).