Two of the UK’s largest asset managers, Schroders and Henderson Group, have revealed how volatility has hit profits and fund flows.
The firms’ profits are down year-on-year – Schroders by £8 million (€9.5 million) and Henderson’s by £16.9 million, according to financial statements released today.
Fund flows have also been impacted, with Schroders seeing inflows of £700 million this year compared to £8.8 billion last year. Henderson fared even worse with net outflows of £2 billion in the first half (H1) of 2016.
Andrew Formica, Henderson’s CEO, said that H1 was dominated by widespread market uncertainty in the run up to the UK referendum.
“Clients pulled back from investing in European assets and UK property, particularly after the referendum result,” said Formica.
Schroders has not just had market volatility to contend with: its long-standing chief executive officer Michael Dobson stepped down in March to be replaced by Peter Harrison. Harrison blames his firm’s performance on the “heightened market volatility”, which he expects to persist and impact investor demand.
Yet both firms saw assets under management (AuM) increase. Schroders AuM is now £343.8 billion compared to £309.9 billion at the same time last year, while Henderson’s assets have increased by 3% to £95 billion.
Both CEOs stressed the importance of diversifying their offering to navigate and prosper in the current economic climate.
©2016 funds europe