Schroders acquisition of a £2.2bn London-based family office cements its foothold in the opposite end of the wealth management spectrum to Schroders Personal Wealth, which caters to the mass affluent.
Schroders announced in a press release on Friday it would acquire Sandaire for an undisclosed sum as part of a wealth management push. The multi-family office will become part of Cazenove Capital, which caters to ultra-high net worth individuals.
CWC Research director Clive Waller described Sandaire as a different beast to Schroders Personal Wealth, the joint venture it entered into with Lloyds in 2018 to cater to the mass affluent.
The tiered ongoing advice charge at SPW is divvied up into amounts up to £1m, which are charged 0.65%, £1m to £2m (0.40%), £2m to £5m (0.35%), or £5m+, which face an ongoing fee of just 0.15%. By contrast, Sandaire caters to just 20 families implying an average net worth of £110m each.
SPW delivered lacklustre results in H1 2020 with £0.1bn net inflows blamed on Covid-related branch closures impacting client referral levels. By contrast, Schroders highlighted momentum in the wider £65.7bn wealth management business, with Cazenove Capital singled out in particular.
SPW had attracted £12.6bn of client money in 2019.
‘The trouble with this sort of purchase is that the money can walk’
SPW competes with St James’s Place to which, Waller said, Cazenove “would look down their regal noses”. He did not expect Sandaire clients would be concerned by the change of ownership, noting Cazenove Capital and Schroders are “pretty blue blooded”.
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But 7IM senior investment manager Peter Sleep said “the trouble with this sort of purchase is that the money can walk”.
A press release announcing the deal noted Schroders was still largely owned by the eponymous family who founded it over two centuries ago while Sandaire is still helmed by the Scott family, who founded it 1996, following the sale of Provincial Insurance, the family business since 1903.
In a press release, Cazenove Capital chief executive Mary-Anne Daly (pictured) emphasised the “established heritages of our two firms”. Together, the businesses plan to “sustain our presence by the side of our clients for generations to come”, Daly said.
Waller said Cazenove Capital had maintained its brand of sophisticated wealth management successfully and that it would be interesting to see if Sandaire rebranded. The press release emphasised that Sandaire’s “boutique-style service” would remain while benefiting from “depth of international investment expertise and financial stability and strength of Schroders”.
Sandaire founder Alex Scott will become chairman of family office services at Schroders. In comments published in the Financial Times, Scott anticipated further family office consolidation as technology and attracting talent increase business costs.
In the press release, he said Sandaire had specialist reach in the family office space while Schroders offered “impressive” global reach and investment capability. “We are proud of the business we have built over the last two decades and look forward to seeing our family and clients flourish under Sandaire’s new ownership.”
Schroders global head of wealth management Peter Hall said the acquisition would be a “springboard” for developing a global family office service and would create “one of the UK’s top multi-family offices”.
