Schroders weathers strong pound to see AUM increase

Dividends growthAsset manager Schroders has seen its assets under management rise by £38.4 billion (€54.3 billion) in the last year, despite losing £10.2 billion in the second quarter (Q2) of 2015 due to the strength of sterling.

The firm benefitted from strong international business, with positive net flows across all channels totalling £8.8 billion, compared to £4.8 billion in the first half of 2014. This brought assets under management at the end of June to £309.9 billion, up from £271.5 billion at the same point last year.

In asset management net revenue increased 12% to £694.3 million and performance fees dropped to £5.9 million, compared to £8.3 million in the first half of 2014. Profit before tax and exceptional items increased 15% to £271.0 million.

Investment performance was strong across a range of asset classes, with 77% of assets under management outperforming their benchmark or peer group over three years.

The institutional segment saw high levels of new business in fixed income and multi-asset, and strong performance across the Asia Pacific region, particularly in Japan.

Schroders’ wealth management business also saw net revenue increase and modest inflows led to a small rise in assets under management, up to £32.0 billion at the end of June.

Overall, Schroders net revenue rose by 11% to £806.2 million and profit before tax and exceptional items was up 17% to £305.7 million. Interim dividends rose by 21% to 29.0 pence per share.

Michael Dobson, chief executive, says: “We generated £8.8 billion of net new business in the first half of 2015 despite heightened volatility in markets towards the end of the period. Net inflows were particularly strong in fixed income and, regionally, in Asia Pacific and Continental Europe.”

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