] acquisition of fixed income manager STW announced today
is all about merging similar philosophies about actively managing investments in the fixed-income markets, according to Schroders' global head of fixed income, Karl Dasher
Dasher said that he and his colleagues evaluated STW for roughly a year. He added that while Schroders has been focused primarily on growing organically, his firm was open to acquisition opportunities if candidates met the following criteria:
1. The investment professionals in question had a philosophy for operating within their particular markets that was common with Schroders.
2. The candidate and Schroders had common business principles regarding client service and operations.
3. The candidate in question had to have a reasonable business proposition.
In the case of STW, Dasher said the investment philosophy of this shop dovetailed well with Schoders’. For example, both teams believe in active sector rotation and active security selection.
“This is about merging with a team of portfolio managers who have a common vision on how to generate alpha in the fixed income markets,” said Dasher. “We have a common vision for what it will be like in fixed income. This will very much be an alpha story in the next five to ten years."
He said that going forward, “index-orientated strategies are likely to struggle compared to unconstrained and higher-alpha strategies.”
Dasher said that Schoders doesn’t expect to do any more acquisitions in this space. Further growth will be done organically in fixed income.
Once the two teams are integrated, he said the firm will look to develop more strategies and possibly more funds in the future. Having STW’s team increases Schroder’s coverage of such markets as tax aware as well as long and short duration products, Dasher added.
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