Schroders profits fall as clients shun risk

Profits at Schroders tumbled during the first half of the year, as the firm suffered substantial outflows driven by clients shunning risk exposure.

The London-based business reported a drop in pre-tax profits of 14% to £340.4 million (€373.2 million) throughout the six-month period.

During the same period last year it recorded pre-tax profits of £371 million.

Schroders suffered an exodus of cash due to subdued investor sentiment, with net outflows of £1.2 billion, primarily from the firm’s equity products. Last year, the firm enjoyed inflows of £1.2 billion.

Due to relatively weak markets earlier in 2019, average assets under management (AuM) were more than 2% lower than the first half of 2018. Despite this, AuM grew to an all-time high of £444.4 billion by the end of June – up from £407.2 billion at the end of last year.

According to chief executive Peter Harrison, the asset manager is continuing to focus on long-term growth. “The overall pipeline of notified net new inflows is strong,” he said.

Schroders has also concentrated on expanding in the Asia Pacific region, specifically with the acquisition of Thirdrock Group’s wealth management business. It has also increased investment in China.

The interim dividend remained unchanged at 35 pence per share.

©2019 funds europe

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