Schroders (LON:SDR) used its annual results presentation for 2025 to outline progress on the first year of a three-year transformation program, while also detailing a proposed all-cash acquisition by Nuveen that management said would accelerate the firm’s strategic ambitions.
Nuveen makes all-cash offer; board recommends deal
Chief Executive Richard Oldfield said Schroders’ board “unanimously” recommends Nuveen’s offer to shareholders after “a series of approaches.” Under the terms presented, shareholders would receive GBP 5.90 in cash plus up to GBP 0.22 in permitted dividends, or up to GBP 6.12 in cash and dividends in total. Oldfield described the proposal as delivering “attractive and importantly, certain value” for shareholders.
Strategic rationale: scale, global reach, and public-to-private platform
Oldfield positioned the deal as meeting the criteria he has cited since becoming CEO—“good for our clients, good for our people, and… good for our shareholders.” He described Nuveen as a “scaled international asset manager” with over GBP 1 trillion of assets under management and operations in 26 countries, supported by parent TIAA, which he said is the sixth-largest insurer in the U.S. The combined group is expected to have more than $1.8 trillion in assets under management and a presence in more than 40 markets.
Oldfield said the combination would create a “global active asset and wealth management powerhouse” spanning public and private markets. He highlighted complementary geographic footprints—Nuveen concentrated in the U.S. and Middle East, Schroders in the U.K., Europe, and Asia—and pointed to a combined private markets capability of $307 billion. He also emphasized the ability to invest more heavily in “AI, broader technology, data,” supported by what he described as a strengthened balance sheet.
As part of the offer, management said Nuveen has made commitments related to the Schroders brand, people, and the U.K., including that London will be the non-U.S. headquarters of the combined business and that Nuveen intends to maintain Schroders’ existing investment and client teams across asset and wealth management.
2025 results: AUM growth, net inflows, and early cost savings
Turning to the year’s performance, Oldfield said Schroders delivered a “strong year,” with operating profit up 25%. Assets under management reached a record GBP 824 billion, up 6%, supported by both markets and flows. The company reported growth inflows up 9% to GBP 142 billion, resulting in GBP 11.2 billion of net inflows.
Oldfield also pointed to investment performance, stating that over 70% of assets outperformed over one, three, and five years. On expenses, he said the company delivered cost savings ahead of plan, generating GBP 75 million of in-year savings net of reinvestment in the first year of the transformation program. He added that the combination of growth and cost actions helped lift EPS by 29%.
Flows by segment: public markets, capital, wealth, and joint ventures
In public markets, Schroders’ “nine leading capabilities” generated GBP 8.1 billion of net new inflows, with strongest demand in global equities, credit, and core solutions. Those gains were partially offset by outflows in regional equity strategies and Asian bonds, resulting in GBP 3.7 billion of net new business for public markets.
Schroders Capital delivered GBP 4.1 billion of net new business, plus GBP 0.5 billion as a first contribution from Future Growth Capital through joint ventures. Wealth management inflows were GBP 3.4 billion, which management attributed to strong performance in U.K. private wealth clients. However, joint ventures recorded an outflow of GBP 5 billion, driven principally by the Chinese joint venture fund management company.
Oldfield highlighted an improvement in intermediary flows to more than GBP 4.5 billion in 2025 from less than GBP 3 billion in 2024, with the fourth quarter described as the strongest since early 2021. He said the uplift was driven primarily by EMEA and Asia Pacific, which he called “typically higher margin regions.”
Institutional net new business improved across regions, with the U.K. including a large OCIO mandate win from E.ON and the St. James’s Place win from the first half, and still reflecting GBP 7 billion of outflows from Scottish Widows. In EMEA, he noted GBP 3.5 billion of net flows that included a sustainable equity solutions mandate from PGGM.
Costs, capital, and 2026 priorities
Finance Director Meagen (who presented financial details during the call) said adjusted operating income increased 6%, supported by markets, mix, and investment performance, while foreign exchange—particularly a weaker U.S. dollar—reduced net operating income by GBP 28 million. She noted performance fees and net carried interest were higher than expected, increasing by GBP 16 million, while gains on seed and co-investments rose by GBP 14 million.
Adjusted operating expenses were flat year-on-year, with GBP 94 million of gross transformation savings partially offset by GBP 19 million reinvested into growth. She also cited inflation, FX, and AUM-related items adding GBP 54 million, and unanticipated building repairs adding GBP 20 million. The cost-to-income ratio ended the year at 71%, and she said the firm expects further progress toward 70% in 2026, with a target of below 70% for full-year 2027.
On capital, she said the year-end capital surplus was GBP 865 million, after accounting for an estimated GBP 250 million impact from Basel 3.1, noting ongoing discussions with the PRA.
Management said transformation work in 2025 included outsourcing contract redesign and service model changes across client service, operations, and technology, contributing to a 10% headcount reduction and a 12% reduction in supplier base year-on-year. Looking ahead, the company said 2026 will focus on disciplined execution and modernization, targeting a GBP 25 million reduction in operating expenses net of investments, while maintaining a “full line of sight” to GBP 150 million net annualized savings by 2027.
In Q&A, Oldfield said positive fourth-quarter momentum carried into January, while also noting the limitations of extrapolating from six weeks of data. He also said increasing deployment within Schroders Capital—particularly in private equity—would require additional resources and process enhancements, including the use of AI to “get through more opportunities more quickly.”
About Schroders (LON:SDR)
Schroders plc is a publicly owned investment manager. The firm also provides advisory and consultancy services. It provides its services to financial institutions, high net worth clients, large corporate, local authority, charitable entities, individuals, pension plans, government funds, insurance companies, and endowments. The firm launches and manages equity mutual funds and manages fixed income mutual funds for its clients. It also manages hedge for its clients. The firm invests in the public equity, fixed income, and alternative investment markets across the globe.
