Schroders confirms Dobson as new chief executive

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Schroders, the fund management group, yesterday confirmed Michael Dobson as its new chief executive and said it would be paying £33.5m for Beaumont Capital Management, Mr Dobson's hedge fund firm. Mr Dobson, 49, succeeds David Salisbury, who was ousted at the end of August following a collapse in profits.

Fund managers expressed surprise at the price Schroders is paying for Beaumont. One said the headline figure was "enormous" – though not significant for Schroders, which has £700m of cash.

Mr Beaumont, a former head of Deutsche Asset Management, is thought to own about 20 per cent of Beaumont, which was set up less than a year ago. Mr Dobson and the other 15 Beaumont partners, who own 80 per cent of the equity between them, will all join Schroders as part of the deal. They are taking 75 per cent of the price in Schroders shares with the balance, in cash and loan notes, payable over three years.

Beaumont has $275m (£192m) of funds under management, and is expected to make losses of £1m during this calendar year.

Mr Dobson, who was appointed a non-executive director of Schroders in April, denied his brief was to prepare Schroders for sale. "The aim is to make the business better. I think there is a lot of talent there and it is a great brand."

He denied that the terrorist attacks on the United States on 11 September had changed his view about running a small independent firm. "What's been happening to markets has been playing to our strengths. I became convinced that it was a great opportunity for Beaumont to build to a broader base more quickly."

The shares rose 11p to 752p.