Schroders CEO: Navigating industry shifts, family ownership and embracing risk
Oct 30, 2024
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In this engaging discussion, Peter Harrison, CEO of Schroders, shares insights from one of Europe’s leading asset managers. He emphasizes the critical shift towards private markets and the transformative role of AI in investment strategies. Harrison also highlights the need for resilient teams and strong leadership, advocating for a culture that embraces risk. Reflecting on challenges in the UK market post-Brexit, he frames the importance of adapting to geopolitical dynamics, especially in China. A must-listen for those navigating the evolving finance landscape!
Long-term family ownership provides investment firms with a strategic vision that supports adaptation in a rapidly evolving market.
Cultural change within organizations, driven by effective leadership, is essential for fostering innovation and resilience amid industry disruptions.
Deep dives
The Secret to Long-Term Success
Committed long-term ownership is key to the enduring success of investment firms. This insight highlights the impact of having family backing, which allows for a 20-year strategic vision. Such ownership structures enable adaptation and evolution in response to market changes, allowing firms to navigate industry disruptions effectively. The importance of sustained, long-term decision-making is emphasized, with companies that lack such a foundation often struggling to survive.
Disruption in Investment Management
Significant changes in investment management have emerged in recent years, notably the growth of passive management and the shift toward private investments. These trends indicate a collapse in fees and a growing focus on private equity and private debt, reflecting a broader industry disruption. The conversation also points out that companies must adapt to the evolving landscape, as remaining static would leave them out of the most lucrative opportunities. As the market dynamics shift, conventional firms face immense challenges unless they innovate and align with current investor demands.
Challenges of the UK Capital Market
The decline of the UK capital market has been attributed to regulatory shifts that deterred risk-taking and resulted in substantial outflows of domestic capital. Over the past 15 years, an emphasis on consumer protection has led to a decrease in equity listings, driving companies to seek more favorable environments abroad. While London has experienced growth in private markets, the reliance on foreign capital raises concerns about domestic savings not benefiting from these opportunities. This reflects a need for the UK to create a more attractive and constructive environment for equity investments to flourish.
The Importance of Cultural Change in Organizations
Cultural change within organizations is critical for fostering innovation and adaptability in response to market shifts. Effective leadership plays a pivotal role in driving this change, emphasizing the need for transparency and a supportive environment where learning from mistakes is encouraged. Companies must cultivate teams that are not only skilled risk-takers but also willing to adapt in the face of changing market conditions. The focus on creating such a culture can empower organizations to navigate disruptions and achieve long-term goals successfully.
In this episode, Nicolai sits down with Peter Harrison, CEO of Schroders, one of Europe’s largest asset managers with nearly 200 years of history. Peter shares insights on navigating a rapidly evolving investment landscape, from the shift toward private markets to the impact of AI and technology on asset management. He also dives into the challenges of the UK market, reflecting on how changing regulations and global competition have reshaped the industry. Tune in for Peter’s thoughts on building resilient teams, risk taking and his advice for young professionals.
In Good Company is hosted by Nicolai Tangen, CEO of Norges Bank Investment Management. New full episodes every Wednesday, and don't miss our Highlight episodes every Friday.
The production team for this episode includes PLAN-B's Pål Huuse and Niklas Figenschau Johansen. Background research was conducted by Sara Arnesen.