The deal serves as one of the largest examples of how the industry is changing. Even five years ago the idea that Schroders, a bastion of the financial services community with more than 200 years history and over £800 billion of AuM, would be sold would have been considered a flight of fancy. Yet here we are.

The announcement raises many questions – not just for the two businesses involved but for the wider industry. From a purely corporate standpoint, the deal will carry appeal for both parties. Nuveen (and its parent TIAA) has a history of making acquisitions; the two businesses’ capabilities appear complementary; and its enhanced scale and geographic reach benefits both sides.

However, history is littered with similar transactions – albeit not necessarily of this size – that have been less than successful. Often this is a result of cultural misalignment, competing priorities and a perceived lack of focus on existing clients, resulting in outflows. 

This is not to cast doubt on the future of the Nuveen / Schroders entity which at face value has a good chance of prospering, but both companies will inevitably be under even more of a microscope given some of the commercial actions that have preceded this acquisition.

More broadly, questions must again be asked about what this type of deal means for the future direction of travel within the investment industry? If an organisation of Schroders’ size and reputation can be acquired, creating another multi-trillion AuM business with a vast product suite and resources, is there still a place for smaller providers?

At first glance, it’s difficult to feel much immediate optimism for the boutique asset manager segment of the investment industry. The sheer size, scale and brand profile of the largest providers inevitably make them the default choices for institutional and wholesale allocators. As one of our consultants wryly noted in a recent meeting – no one is likely to get fired for hiring a big brand name.

Yet challenges can also be the basis for opportunities. Boutiques may lack the scale and depth of resource of the largest brands, but they can still position themselves for success if they are active in promoting their capabilities, specialist expertise, quality and personalisation of service, their business culture and its alignment with clients and prospects. 

The latter is particularly key. Our latest asset owner research – discussed recently in the JPES Market Talk podcast – highlights the importance of a positive corporate culture as part of manager selection criteria. And it is here where boutique managers can really stand out.

Add to this the ability to create various efficiencies through the outsourcing of certain activities and the use of AI, and the playing field – while still slanted – may not be quite as treacherous as it might first appear.

All of this is of course predicated on boutiques being proactive and putting themselves forward via the range of marketing and communications tools at their disposal. Inevitably not every boutique manager will survive, but those that take positive steps to showcase their unique attributes stand a better chance, and still a potential to thrive, than most.