1st Aug 2019 10:09
(Alliance News) - Schroders PLC on Thursday reported a strong rise in assets under management in the first half following a positive investment performance amid a "risk off environment".
At June 30, Schroders assets under management stood at GBP444.4 billion, a new record high for the wealth manager and 9.1% ahead of the GBP407.2 billion seen at the start of 2019.
The wealth manager saw GBP1.2 billion of net outflows in the period, with Schroders' Intermediary funds seeing GBP24.6 billion in outflows.
Schroders attributed the Intermediary fund outflows on a "risk off environment" which resulted in a "lack of demand" for Equity products. The company said these redemptions were partially offset by net inflows into Emerging Market and European Fixed Income products.
Total net outflows were partially offset with acquisitions adding GBP3.3 billion in funds and the company's investment performance added GBP35.1 billion. The investment returns were driven by Schroders Institutional funds, which saw a positive investment performance of GBP20.4 billion.
"We have continued to follow our strategy of selectively investing in key areas to drive the long-term growth of the business through a combination of inorganic investments and organic hiring. Assets under management finished the period at a new high. The overall pipeline of notified net new inflows is strong. The first part of the Lloyds mandate, around GBP45 billion of assets, will fund in the second half of the year," said Chief Executive Peter Harrison.
Lloyds Banking Group PLC has hired Schroders to manage a portion Scottish Widows' assets, which totalled about GBP104 billion as of June 30.
As part of the Scottish Widows deal, Lloyds and Schroders agreed to a new joint venture: Schroders Personal Wealth. The company said Schroders Personal Wealth is to launch later this year.
The wealth manager's pretax profit slipped 14% in the first half to GBP319.3 million from GBP371.1 million the year before.
The company's net income dropped 5.5% to GBP1.03 billion from GBP1.09 billion the year before.
Harrison added: "In a challenging market, we continue to broaden and enhance our range of investment capabilities to help meet our clients' needs. We remain on track with our plans, giving us confidence that our diversified business model and global presence position us well to generate positive outcomes for both our clients and shareholders over the long term."
The wealth manager left its interim dividend unchanged at 35.0 pence each.
Shares in Schroders were 0.1% lower in London on Thursday at 2,969.00 pence each.
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