In another example of a large North American financial institution buying European firms, Nuveen – part of TIAA – announced it is buying Schroders, a UK-listed wealth and investment firm with more than 200 years' history.

Nuveen, the $1.4 trillion AuM US asset manager and wholly owned subsidiary of financial services organisation TIAA, has agreed to buy UK-listed Schroders, a deal that adds to other recent cases of North American firms – such as Miami-headquartered Corient – acquiring wealth management groups. 

Shares in Schroders surged more than 28 per cent from the open, as at around 12:00 GMT. Since the start of the year, they’ve risen 43 per cent, heavily outperforming the FTSE 100 Index of blue-chip UK stocks.

The deals highlight continued M&A consolidation in wealth management on both sides of the Atlantic. 

Schroders, with a history dating back to the start of the 19th century and one of the most recognized brands in investment management and wealth management, oversees a total of $1.1 trillion in AuM. The London-headquartered firm, one of the oldest “family” names in wealth and investment management, has agreed to a £9.9 billion ($13.5 billion) cash transaction. The deal will create a $2.5 trillion combined group – a sign of how scale and the economies it hopefully brings are important considerations. 

“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, CEO, Nuveen. “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, CEO of Schroders, emphasized the scale point.

“In a competitive landscape where scale can help deliver benefits, in Nuveen we see a partner that shares our values, respects the culture we have built and will create exciting opportunities for our clients and people,” said Richard Oldfield, group chief executive, Schroders. “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.”

Nuveen said Schroders will, “for at least 12 months following the completion of the transaction,” continue to be a standalone business within the wider Nuveen group.

Oldfield will remain CEO of Schroders, reporting to Huffman.

“Nuveen and Schroders have an investment-led, client-centric and collaborative culture with well matched capabilities across public and private markets. Together, Nuveen and Schroders will design new solutions to meet wealth and institutional clients’ increasingly diverse needs,” Nuveen said in its statement.

Deal terms
Under the terms of the transaction, each Schroders shareholder would be entitled to receive cash consideration of £5.90 per Schroders share at completion for a total of £9.5 billion. Schroders shareholders would also be entitled to receive and retain dividend(s) of up to 22 pence (in aggregate) per Schroders share prior to completion.

London 
Nuveen said that “in recognition of Schroders’ position as a preeminent financial institution with a deep-rooted history and strong brand, Nuveen expects that London will serve as the combined group’s non-US headquarters and largest office, with more than 3,100 professionals.” 

Boards of directors at both firms unanimously approved the deal, and it is expected to close during the fourth quarter of this year, subject to the satisfaction or waiver of certain conditions, including the approval by Schroders shareholders and relevant antitrust and regulatory authorities. BNP Paribas is acting as financial advisor to Nuveen, with Clifford Chance LLP acting as legal advisor to, Nuveen.