One of Britain’s biggest fund managers is in advanced talks to acquire a division of one of its smaller rivals in a deal that will take its assets under management across the £750bn threshold.

Sky News has learnt that Schroders could announce the purchase of River and Mercantile Group’s (R&M) solutions business as soon as Tuesday morning.

Sources said that Schroders, which manages £717bn on behalf of clients, has agreed to pay approximately £230m for the R&M unit, which has around £43bn of assets under management (AUM).

The sale price is expected to be viewed positively for R&M, representing a boost for AssetCo, the vehicle taken over by fund management veteran Martin Gilbert and which owns a sizeable stake in the company.

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It emerged in August that R&M had appointed Fenchurch Advisory and Lazard to field bids for the group’s fiduciary arm, which manages money for pension funds.

R&M has decided to focus on faster-growing and more profitable businesses instead.

Earlier this year, R&M poached a senior executive from Abrdn, the group that Mr Gilbert helped to create as Aberdeen Asset Management, to join its board.

For Schroders, the purchase of the R&M Solutions business will be the latest in a string of bolt-on acquisitions, some of which have been focused on the fast-growing area of natural capital.

Bloomberg News reported in May that Schroders had also explored, but decided against, a much larger deal: a takeover of London-listed M&G.

Schroders and R&M both declined to comment.

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