Another British institution heads across the pond

Where to start today’s missive? Firstly, Schroders is a British Merchant bank steeped in history, one traditionally with close connections to the British aristocracy. As an example, for many years steered by Lord Airlie, who, when he retired, became Lord Chamberlain to the queen. 50% owned by the family, with at least one member serving on the board; currently, two members serve. A family whose values were to hold the company in trust for the next generation. An institution which I worked for and my father ran for many years. A man from Liverpool who broke what was considered at the time a glass ceiling. The company’s culture, led top-down by the board, emphasised acting with integrity at all times. It was the definition of a blue-blooded bank.

Yesterday, it was announced that the Schroders family has agreed to a £9.9 billion takeover by Nuveen, the asset management arm of US insurance giant TIAA. You could have knocked me over with a feather. Nuveen seem to have got itself a pretty good deal, buying the business for just over 1% of assets under management. Why sell now?  With the growth of exchange-traded funds and the demise of active management, much of what Schroders was built upon, margins across the industry are being crushed. Felt a sad day in part.

What other news? Tech stocks and certain tech sectors are still feeling the brunt of the technology selloff. Another day that started on a positive note for the major US indices ended in the red, as the market continues to assess who will win the AI race and who will lose. The latest sector to take a hit on AI concerns was the logistics stocks. The rout was sparked by an update from tiny AI logistics firm Algorhythm Holdings, which announced that its SemiCab platform, in live customer deployments, was helping its customers’ internal operations scale freight volumes by 300% to 400% without a corresponding increase in operational headcount.  Although the major US indexes are down this year, the declines aren’t that large; moves within sectors are at times brutal.

There was also some mixed macroeconomic data over the past couple of days, further complicating the Fed’s decision-making. January’s employment data was far stronger than the market had anticipated. The U.S. economy added 130,000 jobs in January, the Bureau of LabourStatistics said Wednesday, and although there was a negative revision to last year’s growth, it wasn’t as bad as feared. Later on Thursday, existing home sales plunged 8.4% in January, according to the latest data released today. The January Consumer Price Index is released later today.