“For Schroders, the United States represents by far the largest growth opportunity in the world,” Karl Dasher, head of the firm’s North America business and co-head of fixed income, told ThinkAdvisor on Tuesday.
The United States currently represents about 10% of Schroders’ business overall, and Dasher thinks it can grow to a “much more significant portion of the overall balance.”
“It’s the smallest market share for us in the world, yet it’s the largest market,” he continued. “Our view overall is that we have a platform that today is poised to take market share because we’ve expanded the platform to more core-to-the-client strategies.”
Schroders already manages about $57 billion for clients in the United States, including strategies for clients here that are managed from other areas. Dasher said the firm manages “a similar amount of money” for clients in the United States and globally.
“We have investment teams on the ground in the United States who actually tend to have their largest client base outside the United States overall, and we have services that we provide to U.S.-based clients,” he said.
Historically, Schroders’ success in the United States, where the firm has been doing business for almost a century, has been in extended asset classes and niche strategies like emerging market equities and commodities, Dasher explained. “Those are still very strong areas for us in the States and areas that continue to be a focus for us, but in addition to that, where we’re winning additional new business is in areas that are more core to the clients’ portfolio.”
By “core to the clients’ portfolio,” Dasher means “more holistic mandates such as multi-asset mandates, broader range mandates such as global equity mandates and fixed income.”
“What we’re seeking to do in the United States is to continue to build upon our strengths in some of the more extended asset classes and bring to the market our capabilities in the more core asset areas such as global equities, multi-asset and unconstrained bonds,” he said.
In April 2013, Schroders completed the acquisition of STW Fixed Income Management, Dasher said, and fully integrated the team by September. With that acquisition, “we brought into our capability sphere a very high-quality tax-aware capability and a very high-quality long-duration capability to accentuate our multi-sector offering and those tend to be core investment areas,” he said.
One big area of focus for Schroders in the United States will be global unconstrained bonds. The firm launched this year a global absolute return strategy, called the strategic bond strategy, that has “one of the longest track records you’ll find in unconstrained absolute return investing” outside the United States, Dasher said.