Schroders hit by £20bn loss on Eurozone

BLUE-CHIP fund manger Schroders saw more than £20bn wiped off the value of its funds in the last quarter amid global market turmoil.

The investment group also warned that its intermediary and private banking businesses would continue to face tough conditions until the Eurozone crisis is resolved.

Yesterday in a third quarter trading statement it said assets under management had fallen £22.6bn, or 11 per cent, to £182.2bn at the end of the three months to 30 September, which is in line with forecasts.

“Financial markets are likely to remain volatile with no sustained recovery in equities until we see some resolution to the uncertainties facing the Eurozone,” said the statement.

“Until such time, the environment in Intermediary and private banking will continue to be difficult... and opportunities in Institutional will be held back although we expect to see a continuation of positive net flows from institutional clients.”

Pre-tax profit for the quarter was £101.6m, up from £94.5m a year earlier. Net flows into the institutional business were £2.8bn while intermediary was down £2.7bn and the private bank saw outflows of £100m.

Shares in Schroders – which lost about £50m on its holding in Luminar when the nightclub operator fell into administration last month ­­ – closed down 1.14 per cent, at 1,304p.

David McCann at Numis said most of the sector’s stocks are cheap.

“We therefore continue to prefer Jupiter, Man and Aberdeen where we believe the investment cases are more compelling.