Bottom Line: Company is well placed to grow despite fund manager shake-up

Michael Bow
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SCHRODERS’ half-year results yesterday bore all the hallmarks of a Cassandra-like prophecy. The £1.5bn redemption linked to the exit of equity kingpin Richard Buxton seemed to validate the doom- mongering ahead of the move.
Since Buxton’s new home, Old Mutual, lured £250m more after his arrival it is tempting to treat his exit as bad news for blue-blooded Schroders. Yet closer inspection tells a different story.
Firstly around half of the money redeemed from Buxton’s UK Alpha fund is flowing back into Julie Dean’s highly regarded Cazenove UK opportunities fund, now nestled in Schroders Gresham Street offices.
Secondly, as most fund executives freely admit, June was a tough month for attracting new cash. Rivals also experienced a difficult month. This is likely to have magnified the so-called Buxton effect on Schroders’ redemptions.
Thirdly, the flow of cash following Buxton out the door has been swift. One insider described Buxton’s move as the “textbook way to handle a high level departure”. The orderly exit of money and manager has been helpful because the pain has been brief.