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Schroders has begun a search for a successor to its chief executive Peter Harrison, who is preparing to retire after eight years as head of Britain’s biggest asset manager.
The FTSE 100 group confirmed that Harrison would step down in a market announcement on Wednesday following a Financial Times report, adding that it “expects an orderly transition in 2025”. Shares closed down almost 2 percent at 366.6 pence.
Schroders, whose founding family is the largest shareholder and has assets under management of 750.6 billion pounds, has hired headhunter Russell Reynolds to work on “a full and comprehensive global search,” according to two people familiar with the matter.
Potential internal candidates to replace Harrison include chief financial officer Richard Oldfield, who joined from PwC in October; the company’s global chief investment officer, Johanna Kyrklund; Georg Wunderlin, global head of private wealth; and Meagen Burnett, Group Chief Operating Officer.
Harrison, one of the longest-serving financial services chiefs in the FTSE 100, has led Schroders for two months before Britain voted to leave the EU; A decision that destroyed London’s status as an investment hub for Europe.
He has sought to offset the decline of the company’s traditional business by moving into faster-growing areas such as private markets, acquiring a majority stake in Greencoat Capital – one of Europe’s largest renewable infrastructure managers – and expanding asset management and its division that offers outsourced Chief Investment Officers and liability-oriented investing for pension funds.
These three growth areas now account for more than half of assets under management and their contribution to net operating income increased from 31 percent in 2016 to 48 percent last year.
But critics said Harrison could have used Schroders’ stable shareholder structure and cash reserves to pursue opportunities to transform the company more radically, suggesting the deals he struck were too small to move the lever. So far they have failed to boost Schroders’ share price or profits.
Harrison has been paid more than £50 million since 2016, but gave up some of his deferred income during the pandemic and donated some of his bonus to charity. In 2023 he received £6.3 million.
The group’s share price has fallen 40 percent since its peak in September 2021 and has fallen about 15 percent during Harrison’s tenure as CEO. Schroders recorded a pre-tax profit of £618.1m in 2016 – its first year in the top job – and last year its pre-tax profit was £487.6m.
The share price decline reflects how the business models of active managers worldwide have come under pressure from the rise of cheaper passive investments and a shift in investor demand from public to private markets.
UK players focused on stocks have also had to contend with the fallout from British pension funds’ decades-long move away from holding stocks in their local market, depriving domestic managers of a key source of income.
The Schroder family owns 44.1 percent of the asset manager, and two board members have been associated with the family for more than four decades. Harrison is credited with leading a long-awaited overhaul of what he called the company’s “anachronistic” ownership structure two years ago to ensure shareholders’ economic interest in the group was commensurate with their voting rights. Each of the company’s non-voting shares – a quarter of the total shares outstanding – was converted into one common share with voting rights.
“It has been a great privilege to be CEO,” Harrison, who will remain a director of the company during the succession process, said in a statement. “The company and our employees are very important to me. I believe now is the right time for the board to begin the search for my successor and to do so transparently with our stakeholders.”
Harrison began his career at Schroders and subsequently held positions at other asset managers including Newton Investment Management, JPMorgan Asset Management and Deutsche Asset Management. He was running boutique RWC Partners when he returned to Schroders as global equities head in March 2013, succeeding long-time boss Michael Dobson as CEO three years later.