Pity the British fund manager. They lack scale, carry bloated cost bases and live with the existential angst of burgeoning alternatives and passive fund industries. UK-domiciled funds notched up net outflows of £31.5bn in the first 10 months of the year, according to Morningstar Direct. This can only lead in one direction: further consolidation. Some of the problems are also common to global peers. From a bottom line perspective, rising costs belie ongoing fee compression.
The industry backdrop leaves newly minted boss Richard Oldfield with only so many levers. Previously CFO, Oldfield stresses his pro-growth stripes but he presumably has an eye to streamlining excessive manpower. He scythed the executive committee from 22 to nine before lunch on his first day in the job. Another area worth revisiting is Schroders’ comprehensive — but costly — geographic footprint. Roughly half of AUM represent UK mandates.