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Schroders Continues Asia Expansion Strategy

Tom Burroughes

4 September 2019

UK-listed has entered a strategic agreement with Bank of Communications, the mainland Chinese bank, building on a link that goes back to 2005. The move adds to other Asia expansion moves by Schroders in recent months.
The pact with Bank of Communications covers client services and solutions including distribution, management and development of products in asset and wealth management. The organisations set up a joint venture company, Bank of Communications Schroder Fund Management Co, 14 years ago.

“China is an important part of Schroders’ global strategy, both as a source and destination of capital. We have been investing heavily; establishing strategic partnerships and enhancing our China investment capability with skilled on-the-ground investment and research professionals," Lieven Debruyne, chief executive officer, Asia Pacific, Schroders, said.

The London-based firm has been busy in Asia recently. In April, it told this publication that it intends to explore other distribution partners for its behavioural finance know-how, having recently rolled out investIQ with US banking giant Citibank. In February this year, Schroders bought Singapore-based independent asset manager Thirdrock. Last December, Schroders launched the investIQ offering with Ant Fortune, a subsidiary of Ant Financial Services, the affiliate business of China's Alibaba.

Schroders opened its first representative office in Shanghai in 1994. In 2007, it began working with foreign banks, using their QDII quota to provide clients with overseas investment opportunities. The same year, it launched an Asia-themed multi-asset income fund under the Mutual Recognition of Fund scheme. In 2018, Schroders launched its first private fund in China.

In late May this year, Schroders unveiled a new, larger office in Shanghai and rolled out three new funds.

(Editor's note: Schroders certainly is busy with new offices, JVs, partnerships and hires. For all that, Asia hasn't always proven as easy a place in which to make money as some banks might have previously hoped, institutions such as Schroders and fellow UK-listed shop St James's Place, for example, are stepping up their presence. These businesses are working with local partners - which saves the cost of building local teams from scratch - and hoping that their investment savvy and experience will appeal to clients. With Asia seeing its fair share of geopolitical worries - as in Hong Kong - Schroders will need to show that it understands the local terrain and can manage a range of relationships.)