Schroders sacks Gadbury, Haw

Schroder Investment Management has fired Jeremy Gadbury, director of its Hong Kong Mandatory Provident Fund business. Also let go has been Graham Bateman, a Korea specialist, who left with Gadbury late last week. The pruning comes just two weeks after Richard Haw was sacked in London; Haw had only recently returned to the UK after over 20 years in Hong Kong, latterly as Asia managing director.

People familiar with the organization say the firings are part of a cost-cutting exercise emanating from London. For the past year and a half, the firm has been pursuing a new course to counter the loss of key mandates in Europe and sliding performance. Observers believe this latest round of bloodletting may be a final attempt to stave off pressures to sell the business. “It’s a last throw of the dice,” says one. "Gadbury may have been let go because the firm was unhappy with its MPF market share."

Simon Rigby, Schroder’s managing director for Asia and Haw’s successor, has declined to discuss the specifics behind Gadbury’s departure: “I’d rather not comment on individuals except to say we parted amicably,” he comments. While acknowledging that the firm has indeed been tightening its belt and letting people go, he also notes it has been aggressively expanding as well. He cites, for example, the hiring of John Chessner at the start of this year to run regional research in Hong Kong from the sales side.

The company is also said to be actively pursuing acquisitions in Taiwan; strategic alliances in China; has just won a coveted investment trust management company license in Korea; and has embarked on an aggressive advertising campaign in Japan. This is meant to counter a slowdown in Europe, which Rigby attributes to the mature nature of the UK pension market and the attraction of non-traditional strategies such as indexing for them.

Rigby says a sale of the business is unlikely. Firstly, it has ú1 billion ($1.45 billion) in paid-in capital, so its balance sheet is not at risk. Secondly, the UK-based Schroder family owns 48% of the company and has no need to sell. “Performance in certain areas has not been what it should be," he nevertheless admits, "but last year saw a recovery ... This will be an important year for us.”