Silchester International Investors, the largest external shareholder of Schroders, has offloaded its entire stake in the British asset manager, ending a two-decade-long investment relationship. The move, disclosed in a regulatory filing on Tuesday, represents a significant shift in Schroders' shareholder structure.
Details of the stake sale
Silchester, which had held a 10.4% stake in Schroders, sold the shares through a series of transactions. The exact financial terms were not disclosed, but based on Schroders' closing share price on Monday of 3,456 pence, the stake would be worth approximately £2.3 billion. The sale was executed via a block trade, according to sources familiar with the matter.
Silchester had been a long-term investor in Schroders, with its stake dating back to the early 2000s. The firm, which manages around $40 billion in assets, is known for its concentrated, long-only equity strategies. Its decision to exit entirely comes amid a challenging environment for active asset managers, with many facing pressure from passive investing and fee compression.
Impact on Schroders
The sale is a blow to Schroders, which has been working to stabilize its share price and improve performance. The company's shares have fallen about 20% over the past year, underperforming the broader market. Schroders reported net outflows of £3.4 billion in 2023, reflecting investor caution.
In a statement, Schroders said it was aware of Silchester's decision and noted that the sale was conducted in an orderly manner. The company added that it remains focused on delivering for clients and shareholders. Analysts at Jefferies described the sale as a negative signal, but noted that the stock's valuation may now be more attractive to new investors.
Silchester's exit also reduces the influence of a key external voice on Schroders' strategy. The fund manager had been known to engage with company management on issues such as corporate governance and capital allocation. However, sources said the decision was purely based on portfolio allocation and not a reflection of any disagreement with Schroders' strategy.
Broader context
The sale underscores the shifting dynamics in the asset management industry, where large institutional investors are increasingly reassessing their holdings. Silchester's move may also prompt other long-term shareholders to review their positions. Schroders, which manages over £700 billion in assets, remains one of Europe's largest listed asset managers. The company is led by CEO Peter Harrison, who took over in 2016 and has been focusing on expanding in private markets and wealth management.
