Schroders nets fresh funds in spite of turmoil

Marion Dakers
SCHRODERS shares rose 0.8 per cent yesterday as its four per cent rise in assets under management in the half year outshone a 17.7 per cent slide in pre-tax profits compared to a year ago.

The asset manager said it had £194.6bn on its books at the end of June, due to £2.7bn in net new business and “modest but positive” investment returns.

While Schroders experienced £200m of net outflows from clients in continental Europe as the sovereign debt crisis scared off investors, the UK business attracted a net £400m and the US arm added £1.4bn.

Chief executive Michael Dobson said the performance was resilient, and underpinned a “strong pattern of net inflows going back to 2009”.

However, fund performance has slipped. Around half of Schroders’ funds are outperforming either the market or rivals over the last year, compared to two-thirds since 2009, Dobson told analysts.

“We’ve had some shorter term performance issues; it’s the long-term that’s key,” he added.

In private banking, the firm’s net revenues were down by 10 per cent to £52.6m, which Schroders pinned on a year-on-year fall in assets under management and a client migration into more defensive strategies.

The 200-year old asset manager is investing in the business, increasing headcount by 50 people in the first half of the year, mostly linked to its IT upgrades.

Schroders is also on the lookout for bolt-on acquisitions, following its purchase of a 25 per cent stake in India’s Axis Asset Management in April – but only if the price is right, Dobson said.