Cash holdings rise amid war, but Asia remains key for wealthy: Schroders CEO

Global retail investors have pulled back into cash amid uncertainties from Middle East conflicts, while high-net-worth clients have continued to pursue investment opportunities in Asia and alternative assets, according to the CEO of Schroders. “What we saw in March was a reversal of the trend that we had seen at the end of 2025 and in January and February, when people increased their interest in investing in stocks,” said Richard Oldfield, global CEO of Schroders. “What really happened in March was a shift into a risk-off, particularly from retail investors globally as people moved more into cash.” The sentiment turned after the US-Israel war with Iran began on February 28, which pushed oil prices above US$100 a barrel. The war and the rise in oil prices led to worries over inflation and a knock-on impact on the economy, with the Hong Kong benchmark Hang Seng Index falling 7 per cent in March. “Both retail and institutional investors invest in times when they are feeling confident, and they are certain about what is going on,” Oldfield said. “Facing the uncertainty means they generally hold back from making investment decisions or allocating funds, and certainly retail investors, they’re often sitting on cash.” Under such conditions, diversification and actively managed investment strategies offered the flexibility and bottom-up approach to reallocate capital within different classes to manage risk and capture returns, he added. But Oldfield said high-net-worth clients, defined as those with at least US$1 million investible assets, were still chasing investment opportunities in Asia, including private credit, digital asset and other alternative investments. “The high-net-worth individuals can afford to invest for the longer term, so they are still eyeing investment opportunities that can bring them a good return,” he said, adding that Schroders had been seeing strong investment inflows into Asia in 2026. Oldfield said this was why the merger between Schroders and Nuveen was important, as it could bring in more asset classes to clients. On Thursday, Schroders shareholders voted to accept a £9.9 billion (US$13.4 billion) acquisition offer from US asset manager Nuveen, ending more than 200 years of family ownership at the historic British asset manager. After the merger is completed by the end of 2026, it will create a giant financial firm with about US$2.5 trillion of assets under management, based on the two firms’ data as at the end of last year. The new combined group would become Europe’s second-largest asset manager after Paris-based Amundi, which had US$2.7 trillion in assets under management, according to LSEG Data and Analytics. Schroders will keep its brand after the merger, and Hong Kong and Asian clients would benefit from having more products and services as it could cross-sell Nuveen’s fixed income and private credit products, Oldfield said. He described the merger as a “beautiful combination” because the two firms complemented each other: Nuveen had 94 per cent of its assets in the US, while Schroders was strong in Europe and Asia, with only about 17 per cent of its business in the US. “A fun fact is that the founders of Nuveen and Schroders were both born in Hamburg,” Oldfield said. John Nuveen emigrated from Germany to Chicago in 1866 at age two, and established the investment firm in 1898 with a focus on bond issuance. Schroders was founded in London in 1804 by Johann Heinrich Schroder and his brother, also from Hamburg. One major growth engine for Schroders in the coming years would be retirement and income investment products, particularly for wealth clients, amid Hong Kong’s ageing population. People aged 65 and above accounted for 22 per cent of the city’s 7.5 million residents in 2024, according to official data. Projections indicated that senior citizens would account for 31 per cent of the population by 2036. Schroders is one of the major investment managers for the Mandatory Provident Fund, which covers 4.8 million members, and it has also teamed up with HSBC to provide income-retirement products to support customers’ post-retirement financial needs in recent years. “For many people, retirement is quite long, and you need to try to get capital growth besides preserving your assets and securing income in this part of the world,” he said.