UK Fund Firms Schroders and Abrdn Appoint New CEOs to Revitalize Struggling Fortunes, Reports Reuters

By Sinead Cruise

LONDON (Reuters) – UK fund managers Schroders and abrdn announced the appointment of new CEOs on Tuesday, choosing internal candidates to rejuvenate performance at firms that collectively oversee nearly £1.3 trillion ($1.7 trillion) in assets, amidst a backdrop of uncertain investor sentiment and ongoing pressure on fees across the industry.

Richard Oldfield, currently the chief financial officer at Schroders, will take over as CEO in November, succeeding Peter Harrison. Meanwhile, abrdn, which has faced calls for a breakup due to declining demand for its funds, confirmed that Jason Windsor, the interim CEO and former CFO, will be appointed as the permanent CEO.

Both leaders step into their new roles during a challenging period for the asset management sector. Mid-sized UK firms like Schroders and abrdn, which focus on active funds, are under increasing pressure from competition with cheaper index-tracking products offered by larger firms such as BlackRock and State Street Global Advisors, in addition to rising costs driven by inflation.

Analysts indicate that these structural challenges largely fall outside the control of any CEO. The promotions were described as unanimous decisions by the chairpersons of the asset management firms.

In 2024, shares of Schroders, which has a history spanning 224 years rooted in transatlantic trade, have dropped by 21%, showing little movement on Tuesday. Similarly, abrdn’s stock fell by 0.3%, with year-to-date losses reaching 16%.

Peter Harrison announced his retirement in April after eight years at the helm of Schroders, which manages £774 billion in assets, leading to a search for his successor.

Oldfield, 53, a financial industry veteran, joined Schroders last October from PricewaterhouseCoopers, where he held senior positions for three decades. The company’s lackluster half-year earnings in August highlighted ongoing challenges, as it missed profit expectations and warned of margin pressures.

Schroders initially focused on financing trade between America and Europe, as well as developing infrastructure like railways and power stations, and has since shifted its focus to managing investments for pension funds, affluent families, and high-net-worth individuals. However, even wealthy investors are increasingly looking for lower costs for investment services.

Firdaus Ibrahim, a senior equity analyst at CFRA Research, remarked that while Schroders faces significant issues, falling interest rates could present opportunities if they lead investors to seek higher-return products. He suggested that the new CEO should prioritize cost savings, enhance product offerings, and explore mergers and acquisitions to position Schroders favorably for when market conditions improve.

In the lead-up to Tuesday’s announcement, there was speculation in the media about various external candidates for the CEO position, including former UBS chief Ralph Hamers.

In relation to abrdn, Jason Windsor stepped in as interim CEO in May, following the unexpected resignation of Stephen Bird from the firm, which manages an additional £506 billion in assets. Established from the merger of Aberdeen Asset Management and Standard Life in 2017, abrdn has faced considerable challenges, reporting over £10 billion in outflows each year for the past two years. This year, however, the company has surpassed performance forecasts while reducing costs.

Since the merger announcement, abrdn’s shares have lost more than half their value. Analysts have suggested that a leadership change could rekindle discussions about a potential breakup of the company, which spans traditional fund management and a retail investment platform.

Windsor’s experience in deal-making, including a 15-year tenure at Morgan Stanley, offers some strategic insight, though he recently conveyed that repositioning the group is not an immediate focus. "Windsor has made a significant impression on both internal and external stakeholders since joining abrdn, particularly demonstrating a deep commitment to our clients, customers, and employees," said abrdn Chairman Douglas Flint.

Ian Jenkins will continue as abrdn’s interim group CFO, and the company has initiated a search process for a permanent appointee to that role.