Schroders gorges itself on clients’ cash as inflows point to industry recovery

HOPES of a recovery in the fund management industry were sustained as Schroders reported record inflows of £9.7bn for the first quarter yesterday.

Following in the footsteps of Aberdeen and F&C, the 206-year-old institution said high street customers and corporate clients clambered aboard rising equity markets in the three months to 31 March.

Total assets under management jumped 63 per cent to £167.9bn. Pre-tax profits recovered more than sixfold from £12.2m to £93.2m in a set of results described by analysts as “very, very strong”.

Asset managers have endured a torrid recession, haemorrhaging cash as clients pulled funds out amid plunging equity markets. Schroders is the latest firm to produce evidence that green shoots are finally sprouting in the battered sector.

But in a note of caution, chief executive Michael Dobson said retail flows had begun to slow in the second quarter. Dobson said institutional flows continued to improve and the business remained “well placed for long-term growth”.

Shares in Schroders rose 6.1 per cent to £13.89 on the news.

Numis analyst David McCann said signs of inflows across the industry were encouraging but warned they could “not necessarily be extrapolated going forwards”. McCann said the outcome of the general election would determine risk appetites.