Schroders has agreed to acquire British investment group River & Mercantile Group’s (RMG) UK Solutions division, which comprises its fiduciary management and derivatives businesses.
The British fund manager will pay around £230m for the R&M’s solution unit, which is expected to bolster its fiduciary management business.
It will enable Schroders to cater to the evolving requirements of pension funds.
The deal would add approximately £42bn in assets to Schroders.
Schroders Group chief executive Peter Harrison said: “This acquisition further enhances our ability to meet the increasingly complex needs of pension fund clients and is consistent with our growth strategy.
“The business brings with it a well-respected team, with a strong track record of success and is a good cultural fit with Schroders. We see significant opportunities from this partnership.”
As part of the deal, RMG CEO James Barham will join Schroders to continue to lead the Solutions Division. He will report to Harrison.
Schroders also said that the acquired division will maintain its existing strategic advice, investment process, integrated implementation and service model.
The transaction, subject to regulatory approvals, is expected to be close in the first quarter of 2022.
This latest deal follows a series of consolidation initiatives by Schroders.
In May, Bloomberg reported that the firm abandoned a plan to acquire investment manager M&G after evaluating the deal for months.
The deal, which was anticipated to form a UK fund powerhouse managing over $1trn of assets, was ditched by Schroders over cost concerns.
Its largest acquisition till date is the $644m takeover of wealth manager Cazenove Capital in 2013.
Other developments at Schroders
Last month, Schroders signed a long-term strategic partnership with Oman’s Bank Muscat to further bolster its business in the Middle East region.
The same month, Schroders Singapore entered a strategic alliance with Thailand-based Robowealth to extend a range of digital wealth solutions for investors in Thailand.
The firm reported a 33% rise in pre-tax profit in H1 2021, with assets under management reaching a new record driven by inflows in mutual funds.