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IPE special report May 2018

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Schroders sells indexing business to Hermes

UK- Schroders has announced the sale of its index tracking business to the independent fund manager Hermes Pensions Management for £4.5m after owning it for just over two years.

The deal, which remains subject to approval from the FSA, means Schroder Hermes will return to its original owners. In July 2000 Schroders acquired Liberty International Pensions Limited, of which Hermes’ passive business was a subsidiary.

Under the new ownership, the business will continue to be managed by Ken Phillips who has held a senior management position in Schroder Hermes since its inception and who will be joining Hermes this week as a director.

Schroder Hermes is an authorised UK insurance company, something that Hermes chief executive Tony Watson maintains will be helpful as it develops new products and services for the UK market.

Schroders, meanwhile, it is to focus on the higher-margin active management end of the business. The decision to sell its index management group comes after chief executive Michael Dobson announced the disposal of its non-core businesses after a pre-tax loss in 2001 of £8.1m.

Schroders has decided to sell its DC administration business to the South African finance company Alexander Forbes and has already cut back its private client operations and outsourced the administrative arm of its mutual fund business.

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