In this week’s newsletter:
You wait for a big M&A deal and two come at once. Rio Tinto RIO and Glencore GLEN have walked away from a merger, but two other FTSE 100 deals came hot on their heels. On Monday it was NatWest NWG buying wealth manager Evelyn Partners for £2.7 billion. On Thursday it was privately-owned US asset manager Nuveen buying 222 year-old London-listed firm Schroders—an agreement that, if approved, will create one of the biggest asset managers in the world, with USD 2.5 trillion under management.
On the surface, there is much to celebrate for investors in Schroders, who stand to earn a pretty penny from the decent premium Nuveen offered on Schroders’ stock. But every deal says something about the acquiree and its home. With the Schroders sale, it’s lost on nobody that the company was in an identity crisis. As Morningstar equity analyst Johann Scholtz says, “it has neither the scale to compete against the global giants nor is it a nimble boutique focused on a niche.” Active management, he says, is in a “secular decline”. Additionally, if the deal is approved, it will mean another London constituent exiting the market, and one that’s been listed since 1959. With Starling’s much-discussed flotation looking like a non-starter, the words “secular decline” prompt thoughts of more than just asset management and exorbitant fees.
The FTSE 100 is doing well despite these concerns, and despite the UK’s overall sluggish economic performance. The blue-chip index is up around 4.6% in 2026 so far, positioning it for its best annual gain since last year, when it gained 21.25%. Clearly, it is at least in some way insulated from events in Westminster, where this week it briefly appeared highly likely that Prime Minister Keir Starmer would lose his job. Starmer has clung on, but markets already fear his replacement, and it’s difficult to know whether he will make it to the May elections, never mind the next general election in 2029. With the Labour government struggling to deal with one scandal after another, he will be hoping that, in the next three months, two don’t come at once.
Ollie Smith, Senior Editor
This Week’s Key Earnings
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