Investment manager Schroders is planning to acquire rival Cazenove Capital, subject to shareholder approval, for £424m.

The acquisition will create the UK’s biggest charity fund manager in terms of fund under management.

Andrew Ross, chief executive of Cazenove Capital, said: “In combining with Schroders, we will create a pre-eminent independent private banking and charities business in the UK, with a broader capability covering investment management, financial planning, deposit-taking and lending services.”

Ross added: “Our charity and private clients will continue to be looked after by their existing teams whilst benefitting from a broader range of services and more extensive geographical investment expertise.”

In the short term it is expected that the two charities teams will continue to run independently. Details of how they will operate in the long term are yet to be established.

Each firm has more than £3bn of charity assets under management. Cazenove has £17.2bn total assets under management, while Schroders has £212bn.

The combined £6bn charity assets under management would see them overtake other major charity fund managers CCLA, Newton, BlackRock and Sarasin in terms of assets under management.

In November last year wealth managers Quilter & Co and Cheviot Asset Management announced that they would merge to form Quilter Cheviot.

More than 60 different financial firms provide services to the largest 100 charities in the UK, although less than half have more than one client from this group.¹

¹ Pharoah, C., and Pincher, M., Best Advice?, Caritas Data (www.charitiesdirect.com/caritas-magazine/best-advice-226.html, accessed 27/03/2013)