Merging for Scale is easy but culture is more difficult

The Nuveen-Schroders deal offers a live test of whether the industry is moving beyond rhetoric and towards measurable cultural progress, writes Natalie Kenway

Nuveen’s proposed acquisition of Schroders is the latest signal that consolidation in asset management is accelerating - and that scale is increasingly viewed as the answer to the structural pressures our industry is facing. 

The strategic rationale around distribution, complementary product strengths and global reach is clear. 

But mergers are never just financial transactions. They are cultural turning points that can either strengthen or destabilise client trust.

Too often, M&A headlines focus on assets under management and operational efficiencies while overlooking the human reality beneath the deal. Investment teams, leadership styles and decision-making frameworks do not merge overnight. Clients know this - and while they may not take any immediate reaction, they will be keeping a close eye on developments to see how culture is protected during the transition.

Bev Shah, co-CEO of City Hive, says: “When organisations merge, culture is often framed as a secondary consideration - but in reality it’s one of the biggest drivers of long-term success or failure. Deals like this can either accelerate meaningful change or entrench legacy behaviours. The industry needs to see leaders prioritise transparency, listen to their people and embed accountability from day one if trust is going to be maintained.”

City Hive’s recent research, Promises and pitfalls: Finding good client stewardship amid investment M&A, makes a compelling case that culture is not a ’soft’ issue. It is a material risk lens. The report found clients increasingly assess mergers through the prism of leadership behaviour, governance and team stability, recognising that disruption to culture can ultimately affect investment outcomes and service continuity. In an environment where consolidation is rising - with hundreds of UK financial services deals recorded in recent years - this perspective matters more than ever.

Cultural integration

From a City Hive standpoint, this proposed transaction raises a familiar question: how intentional will the cultural integration really be? Asset managers frequently talk about values during deal announcements, yet the real work begins once integration starts. Without clear accountability, inclusive leadership and transparency, even strategically sound mergers can struggle to maintain momentum.

This is where the ACT Framework becomes particularly relevant. ACT encourages firms and allocators to treat culture as a core component of stewardship, embedding it into due diligence, governance and post-merger integration. The Nuveen-Schroders deal offers a live test of whether the industry is moving beyond rhetoric and towards measurable cultural progress. Consolidation does not have to dilute identity; done well, it can create space to build more inclusive, collaborative environments that reflect the future of asset management rather than its past.

Clients, meanwhile, will be focused on practical realities. How will investment teams be supported? Will decision-making remain consistent? Can the combined group maintain the entrepreneurial edge that defined both firms individually? These are not peripheral questions - they go to the heart of whether consolidation delivers durable value.

While the strategic logic behind scale and complementary strengths may be compelling, the success of this merger will ultimately be judged by what happens next. Maintaining transparency, protecting investment culture and ensuring service continuity will matter far more than headline AUM figures. City Hive’s research shows that the firms which navigate M&A most successfully are those that recognise culture as infrastructure, not messaging.

The Nuveen-Schroders deal is a defining moment - not just for the two organisations involved, but for how the wider industry approaches consolidation. If culture is placed at the centre of integration, it could become a case study in how growth and stewardship align. If not, it risks becoming another reminder that in asset management, scale is easy. Sustained trust is not.

To download the City Hive report on click here: Promises and pitfalls: Finding good client stewardship amid investment M&A

Listen to the ACT Stewardship Council talk to Asset TV about M&A and culture