He will officially retire from the company next June and Threadneedle will continue to be run by chief executive officer Crispin Henderson.

Mr Davies joined Threadneedle in 1995 as chief investment officer, in 1999 he went on to work as chief executive officer before becoming executive chairman in 2007.

He was responsible for leading the firm in its transformation from small manager of in-house insurance assets to an international asset manager.

During his time with the firm he increased assets under management from £22bn primarily in insurance assets to £68.8bn from a broad range of funds.

Mr Davies said: “I’m pleased to have been part of Threadneedle’s successful development over the past 16 years. Threadneedle has never been in a stronger position.”

Mr Henderson said: “Simon has been instrumental in Threadneedle’s successful development over the past 16 years. He has guided the company through a period of growth and transformation, against a backdrop of fundamental change in the industry and challenging financial markets, to a position of real strength today.”

Threadneedle recently announced a deal with LV= to outsource the LV=  asset management and external funds to Threadneedle.

This will increase the total assets under management by £8.4bn.