is dramatically transforming Schroders'
] U.S. distribution, thanks to a key new partnership. Here's why.
| Karl Dasher|
Chief Executive Officer - North America, Co-Head of Fixed Income
Yesterday Dasher, CEO of Schroders North America, and Hartford Funds
] president Jim Davey unveiled
a deal where Hartford will adopt 10 of Schroders' 16 U.S. mutual funds while keeping Schroders on to subadvise those funds. And Schroders will hang on to its other six U.S. mutual funds.
"They're going to be maintained as institutional-only funds," Dasher tells MFWire
Schroders has more than $466.9 billion in AUM worldwide as of March 31. In North America, Schroders has more than $50 billion in AUM and more than 250 people. $15 billion of that is in the intermediary channels in the U.S., including about $2 billion in the 10 mutual funds that Hartford is taking over.
, chief investment officer of Hartford Funds, says that bringing Schroders staff over to Hartford "is not part of the plan."
"We're really not commenting in depth on that," Dasher says. "There will be some rationalization and there's likely to be some cross-pollination of talent across the two organizations."
Dasher describes the Hartford alliance as "a very pragmatic solution", "a way to immediately enhance [Schroders'] presence" in the financial advisor channel.
"We've been looking at ways to strengthen our presence in the U.S. private client market through intermediaries," Dasher says.
"The industry has changed a lot in the last several years. The cost of being a major, multi-product platform has gone up quite a bit," Dasher adds. "The required scale to be competitive has gone up. While we have that scale in our investment platform globally ... we didn't have that scale either on the distribution side or on the mutual fund side in the U.S."
The deal with Hartford also comes as Dasher and his team are preparing to move, but only within midtown Manhattan. On Tuesday CBRE Group
confirmed a deal that entails Schroders moving its North American headquarters about a mile, from 875 Third Avenue (between 52nd and 53rd) to a brand new building at 7 Bryant Park. The move is scheduled for 2017, and Bank of China Group Investment will be Schroders' landlord.
The 10 Schroders funds that Hartford will take over include:
-the four-star, $78.3-million Schroder Absolute Return EMD and Currency Fund
, which will become the Hartford Schroders Emerging Markets Debt and Currency Fund
-the five-star, $136-million Schroder Broad Tax-Award Value Bond Fund
, which will become the Hartford Schroders Tax-Award Bond Fund
-the three-star, $1.2-billion Schroder Emerging Market Equity Fund
, which will become the Hartford Schroders Emerging Markets Equity Fund
-the $58.5-million Schroder Emerging Markets Multi-Sector Bond Fund
, which will become the Hartford Schroders Emerging Markets Multi-Sector Bond Fund
-the four-star, $158.5-million Schroder International Alpha Fund
, which will become the Hartford Schroders International Stock Fund
-the four-star, $295.8-million Schroder International Multi-Cap Value Fund
, which will become the Hartford Schroders International Multi-Cap Value Fund
-the $26.4-million Schroder Global Multi-Asset Income Fund
, which will become the Hartford Schroders Income Builder Fund
-the $66.9-million Schroder Global Strategic Bond Fund
, which will become the Hartford Schroders Global Strategic Bond Fund
-the five-star, $122.6-million Schroder U.S. Opportunities Fund
, which will become the Hartford Schroders U.S. Small Cap Opportunities Fund
-the five-star, $96.8-million Schroder U.S. Small and Mid Cap Opportunities Fund
, which will become the Hartford Schroders U.S. Small/Mid Cap Opportunities Fund
On the flip side, Schroders will keep six, mostly institutional U.S. mutual funds. Those funds are: the $22.3-million Schroder Emerging Markets Multi-Cap Equity Fund
; the $13.2-million Schroder Emerging Markets Small Cap Fund
; the four-star, $861.8-million Schroder North America Equity Fund
; the three-star, $117.5-million Schroder Total Return Fixed Income Fund
; the $25.1-million Schroder Short Duration Bond Fund
; and the four-star, $75-million Schroder Long Duration Investment Grade Bond Fund
Stay ahead of the news ... Sign up for our email alerts now