Schroders Plc has agreed to aquire Cazenove Capital Holdings Ltd. for £424 million as a means to bolster its private-banking operations.

Schroders will pay 135 pence a share in cash for Cazenove Capital, which is owned by its current and former employees, the London-based fund manager said today in a statement. The deal will add 17.2 billion pounds of assets, increasing Schroders’s funds under management to about 229.2 billion pounds.

The combination brings together two of the City of London’s oldest firms, which can both trace their histories back to the 19th century. With the purchase, Schroders is seeking to counter a decline in revenue at its private banking unit and shore up assets in Britain as Richard Buxton, head of U.K. equities and manager of its 3.5 billion-pound Alpha Plus fund, prepares to leave for Old Mutual Plc later this year.

“It’s a positive deal for both parties, which will add scale to Schroders’s underperforming private bank,” said Peter Lenardos, a London-based analyst at Royal Bank of Canada with a buy rating on Schroders. “It’s also earnings accretive as Schroders had a lot of surplus capital that was earning minimal returns.”