The Schroders story

Schroders’ history began in 1804 when Johann Heinrich Schroder became a partner in his brother’s London-based firm. The company rapidly became a prosperous business, focusing on the finance of trade between America and Europe, particularly in tobacco, cotton, sugar and rice.

The business took a big step forward when it began issuing bonds for overseas borrowers in the London market. The firm’s first bond was given to merchants in the Cuban sugar trade to finance the Matanzas and Sabanilla Railway.

Schroders’ strong connections with Latin America led to the firm being appointed as the British agent for the sale of Peruvian guano – an important fertiliser at the time. A specialist department was established to handle the guano business and for the next decade it made a significant contribution to the firm’s profits.

Schroders introduced the Japanese government's first foreign loan to the London market. This raised £1 million to finance the construction of the Tokyo-Yokohama railway. Upon repayment, Schroders was presented with a testimonial on silk by the Minister of Finance, thanking the firm for the 'trouble' that they had taken in connection with this loan.

In 1895, Bruno Schroder became a partner in the firm. He immediately revised how the business operated and considerably increased its profits. Along with his partner, Frank Tiarks, Bruno Schroder went on to lead the business for the first four decades of the twentieth century.

The Edwardian years were a glorious time for Schroders. One of the highlights of this period was the firm’s decision to buy out a massive £15 million loan on behalf of the Brazilian state of Sao Paulo. These funds were required for an ingenious and controversial scheme to stabilise the price of coffee. The success of this initiative enormously enhanced Schroders’ reputation, and it was a key factor in establishing the firm in the top tier of London merchant banks.

One of the key consequences of the First World War was the emergence of New York as a financial centre to rival London. In 1923 the Schroder partners took advantage of this, establishing a firm in New York, the J Henry Schroder Banking Corporation or Schrobanco as it came to be called. Schrobanco prospered from the outset, rewarding a bold initiative which was unique amongst London merchant banks.

The 60s and 70s saw Schroders become a global force. We established subsidiary or associate companies in Amsterdam, Belgium, Bermuda, Brazil, Hong Kong, Lebanon, Singapore and Switzerland. In addition, representative offices were opened in Argentina, Colombia, France, Germany and Japan.

The 'Big Bang' of October 1986 was preceded and followed by a restructuring of the financial services industry of the City. Schroders' strategy in this period of particularly rapid change was to focus on a number of core capabilities, one of which was asset management. At this time, Schroders bought a 50% stake in the well-known Wall Street investment bank, Wertheim, and sold Schrobanco to the Industrial Bank of Japan.

Schroders acquired the remaining 50% of Wertheim, which it later renamed Schroder and Co. Inc.

By the new millennium, funds managed by the asset management division, Schroders Investment Management, had grown to over £140 billion. In an increasingly competitive environment, the Group focused on its aim to become a world premier asset manager, selling its investment banking division to Salomon Smith Barney in May 2000.

Schroders acquired Beaumont, an absolute return asset management business focusing on high net worth individuals and professional investors.