Schroders CEO Highlights Potential of Active Management Amid Global Uncertainty

Richard Oldfield, the newly appointed chief executive of Schroders, has vowed to deliver £150 million in cost savings as he navigates the evolving investment landscape. Since taking the reins in November, he has embraced a hands-on approach, even dining in the staff canteen and forgoing his company car. These actions underline his commitment to aligning the firm with changing market demands while maintaining a prudent approach to spending.

Oldfield ascended to the top role at the FTSE 100-listed asset management firm after 30 years at PwC, with his most recent position being Schroders’ finance director. Now leading the company, he is advocating for active investment strategies as a means of staying competitive in an environment increasingly dominated by passive funds. Passive investing, which tracks market indices, has grown in popularity due to its low costs but faces criticism for exacerbating market concentration and neglecting undervalued opportunities.

Discussing the impact of international events on markets, Oldfield pointed to the unpredictability of current geopolitics, citing policies from American president Donald Trump as a contributing factor. Tariffs, economic shifts, and ongoing geopolitical challenges have highlighted the need for agility in investment strategies. According to Oldfield, active managers like Schroders can mitigate these risks by selectively picking stocks that balance returns against these uncertainties.

The debate about passive versus active management extends beyond investment philosophy. Oldfield noted that passive funds may unintentionally prioritise large multinational companies, increasing their dominance while restricting capital flows to smaller enterprises. He highlighted how tech giants, including Apple, Microsoft, and Amazon, already account for a significant portion of the US stock market, creating heightened risk should tech shares experience a downturn.

Furthermore, Oldfield discussed the broader implications for British savers. Investing in global passive funds, he explained, often diverts UK tax benefits and savings into supporting economies abroad. He suggested potential reforms, such as tailoring ISA rules to incentivise investments in UK-listed companies, which could promote national economic growth. Proposals like this aim to rebalance the focus towards UK equities and encourage greater risk-taking among domestic investors.

As part of the conversation surrounding the UK market, Oldfield’s counterpart at Aberdeen – formerly Abrdn – Jason Windsor also weighed in on enhancing domestic investments. Windsor has pushed for the removal of stamp duty on shares, arguing such a move would encourage direct investments into British markets. His strategy to revive Aberdeen’s fortunes includes overhauling its structure and name, distancing the firm from past decisions by his predecessor.

Buoyed by their leadership, both Schroders and Aberdeen experienced a positive market reaction. By the end of last week, the share prices of both companies had risen by more than 10 per cent, reflecting investor confidence in the renewed focus on the value of active fund management and their commitment to supporting UK market growth.