quit on June 30, amid internal wrangling about the future of Britain's largest remaining independent investment and money management firm.

Kotler's resignation, announced to US employees in a May 7 internal memo obtained by Reuters on Friday, comes two weeks after the departure of the group's New York-based global head of corporate finance, Richard Broadbent.

The 185-year-old group, which is about 50 percent owned by the founding Schroder family, faces increased competition from US investment banks and recently lost two highly rated analyst teams to rivals.

A spokeswoman for the firm in New York declined comment, and Kotler was not immediately available.

Broadbent's resignation came as a shock because the rising star had moved to New York last summer to help integrate the US unit, Schroder & Co. Inc., into the group. Schroders bought full control of the US unit, formerly known as Schroder Wertheim, in 1994.

Broadbent had put together a plan to beef up the firm's global investment banking, but left before the initiative could be fully implemented, according to one Schroder employee.

Kotler, a 25-year Schroder veteran, will become non-executive co-chairman of the firm's US unit, after June 30.

The firm is searching for a replacement for Kotler in his role as the unit's chief executive and president, the memo said. The group's chairman, Win Bischoff, will become the US unit's other co-chairman and take a more active role in its management.

"While we are strong in the US equity business, our corporate finance business needs reinforcement and investments,'' Bischoff said in the memo.

"Our competitive position in Europe and Asia requires that we build a successful US business.'' Bischoff, who said he would be spending "a considerable part'' of his time in New York, added: "We are therefore proposing to step up the pace of development of Schroders in New York, and the pace of integration with the rest of the group.'' Schroders posted a five percent drop in 1998 profits to 232 million ($380 million), after a provision of 43 million for bad Asian debts.