The deal for 100 per cent of the share capital of NewFinance will comprise a $101 million consideration and as much as $41 million more, dependent upon certain targets being met.
The combined Schroders and NewFinance business will have a total of $3.2 billion worth of assets under management.
The fund management company said it planned to consolidate its investments this year and reported growth pre-tax profits for 2005 of $437 million, up 18 per cent from $369 million in 2004.
Schroders witnessed strong growth in its asset management business, with profits up by 60 per cent to $338 million. Funds under management increase by 16 per cent to $213.6 billion.
The company announced a final dividend of 14.5 pence per share, up from 13.5 pence in 2004, creating a total 2005 dividend of 21.5 pence per share.