SHARES in British fund management powerhouse Schroders slumped over nine per cent yesterday, after it revealed weaker-than-anticipated profits.
The blue-chip investment firm posted an 11 per cent increase in profits over the first three months of this year, after an unexpected loss on investments and a slowdown in retail fund flows.
Pre-tax profit for the firm for the three months to the end of March was £104m, compared with forecasts of up to £117m. Net inflows hit £3.1bn for the firm over the first-quarter, giving the firm funds under management of £201.4bn in total.
While the core businesses of asset management and private banking posted higher profits than last year, the group segment which comprises returns on the company’s investments, saw a loss of £0.2m during the period.
“We had some private equity gains in the first quarter of last year which we didn’t have in the first quarter of this year. These are unpredictable and can be lumpy,” said chief executive Michael Dobson.
Oriel Securities analyst Keith Baird said the market selloff was an overreaction. “I think the market’s gone risk averse and anything with any flaws is being kicked. To that extent I think it's an overreaction,” he said.
Schroders’ shares closed 9.2 per cent lower at 1,700p.