Schroders says Eurozone woes hitting demand
THE CHIEF executive of Schroders yesterday warned of the impact of more Eurozone turmoil as the asset manager posted an eight per cent drop in first quarter profits.
Michael Dobson said he was wary of events in Europe despite a recent easing in market swings.
“You can trace investor demand pretty closely to what’s happening in the Eurozone and, below, reflected in equity markets. There are signs of a slowdown. The impact of market uncertainty is seen most immediately in the retail sector, but it also impacts institutional clients.”
The blue-chip money manager posted an eight per cent fall in pre-tax profits to £95.5m due to lower volumes in the three months to 31 March. Net inflows of £1.6bn were nearly 50 per cent lower than in the first quarter of last year. Private banking saw outflows of £100m.
Total funds under management rose 6.6 per cent from the end of last year to £199.6bn.
Schroders also said it had bought a 25 per cent stake in Axis AMC, the asset management subsidiary of Axis Bank, the third largest private sector bank in India, as it aims to tap into the growing middle class in Asia’s third-largest economy.
“I think it’s a very exciting long-term market, and I would emphasise long term,” Dobson said.
The update capped a mixed week for the industry. Aberdeen Asset Management said assets rose nine per cent after strong fund performance outweighed net outflows in its first-half but Henderson posted a net outflow of £857m in the first quarter.