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Schroders has kicked off a search for a successor to its chief executive Peter Harrison, who is preparing to retire as the boss of the UK’s largest asset manager after eight years.

The £750.6bn FTSE 100 group confirmed Harrison would be stepping down in an announcement to the market on Wednesday after a report by the Financial Times, adding that it “anticipated an orderly transition during 2025”.

Schroders, whose founding family is its largest shareholder, has hired Russell Reynolds, the headhunters, to work on “a full and extensive global search”, according to two people familiar with the matter.

Among the potential internal candidates to replace Harrison are chief financial officer Richard Oldfield, who joined from PwC in October; the firm’s global chief investment officer, Johanna Kyrklund; Georg Wunderlin, global head of private assets; and Meagen Burnett, group chief operating officer.

Harrison, one of the longest-serving financial services bosses on the FTSE 100, has steered Schroders since two months before Britain voted to leave the EU; a decision that disrupted London’s status as an investment hub for Europe. 

He has sought to offset the decline of the company’s traditional business by pushing 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 in wealth management and in its business line that offers outsourced chief investment officers and liability-driven investing to pension funds. 

These three growth areas now make up more than half of its assets under management, and their contribution to net operating revenue increased from 31 per cent in 2016 to 48 per cent last year. 

But critics said that Harrison, who was paid £6.3mn in 2023, could have used Schroders’ stable shareholder structure and cash reserves to be more radical in capitalising on opportunities to reshape the business, suggesting that the deals he struck were too small to move the dial. So far, they have failed to lift Schroders’ share price or profits. 

The group’s share price is down 40 per cent since its peak in September 2021, and has dropped about 15 per cent during Harrison’s tenure as CEO. Schroders recorded £618.1mn of profits before tax in 2016 — his first year in the top job — and last year profit before tax was £487.6mn.

Line chart of Share prices rebased showing Schroders shares have fallen sharply since their peak in 2021

The share price fall reflects how the business models of active managers globally have come under pressure from the rise of cheaper passive investing and a shift in investor demand from public to private markets.

British players who are focused on equities have also had to contend with the fallout from a multi-decade shift by UK pension funds away from holding shares in their local market, which deprived domestic managers of a key revenue stream. 

The Schroder family owns 44.1 per cent of the asset manager, and for more than four decades there have been two board members connected to the family. Harrison is credited with leading a long-awaited overhaul two years ago of what he called the firm’s “anachronistic” ownership structure, to ensure shareholders’ economic interest in the group matched their voting rights. Each of the company’s non-voting shares — a quarter of the total in issue — were converted into an ordinary share carrying voting rights. 

“It has been an immense privilege to be CEO,” said Harrison — who will remain as a director of the company during the succession process — in a statement. “I care about the firm and our people deeply. I believe that 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 then held roles at other asset managers including Newton Investment Management, JPMorgan Asset Management and Deutsche Asset Management. He was running boutique RWC Partners when he was tapped to re-join Schroders as global head of equities in March 2013, three years later succeeding its long-standing boss Michael Dobson as chief executive.

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