Equities  

“You have got to keep the bench full of talent”

Imagine for a moment you are starting your first day as manager of one of the world’s best-performing football teams. Nervous? Absolutely.

Then imagine you walk in to your new office, ready to take on the challenge of that new role and you are told your star forward – who just keeps on delivering week after week – is leaving.

That analogy illustrates what happened to Peter Harrison when he took on the role of global head of equities at Schroder Investment Management earlier this year.

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Excited about joining what he described as a company with “a really nice culture, really good people and one I have a huge amount of respect for”, his first day was mired by news that star UK equity manager Richard Buxton was leaving the firm after 11 years to join Old Mutual Global Investors.

“Richard is quite a distinctive manager and for me there wasn’t a right answer in how to deal with that from an industry point of view,” Mr Harrison explains. “It is hard to say, under those circumstances, if the manager should continue to run the money until he leaves, but in this case that was the right thing to do for the clients. Commercially it may not have been the right thing, but it was right to give the clients that breathing space.

“That was a baptism of fire,” he admits.

In some ways the pressure on Mr Harrison became more intense as news of Schroders’ deal to buy Cazenove came to light a week after Mr Buxton’s announcement. The acquisition would include the appointment of big-name managers such as Julie Dean and Paul Marriage.

“People automatically assumed Richard knew about everything,” Mr Harrison says. “Of course, he didn’t, but immediately people tried to connect those dots.”

In spite of many industry commentators viewing the departure of Mr Buxton as a negative event for Schroders, in reality what was left in the aftermath was a more evenly spread UK equity team. No longer was Mr Harrison faced with having just one key player; he now had a handful, each with differing styles and products to offer the market.

He adds: “The UK is our biggest market and it is the single most important thing we have to be good at. To put all of that on one manager doesn’t feel like the right way to organise the business.

“The changes we have made mean we now have a collection of managers that don’t run money in the same way – although you still get this ‘hot bed’ of ideas – and ultimately we have more to offer. For me that is the right way of organising that part of the business.”

Having previously held roles at JPMorgan and Deutsche Bank, Mr Harrison joined Schroders in March from RWC Partners, where he had held the chief executive role since 2006 and built the business from 20 people to 100.