Schroders reports record AuM despite some challenges

5th Nov 2024 07:18

(Sharecast News) - Schroders reported a record high in assets under management on Tuesday, reaching £777.4bn as of 30 September, although large third-quarter outflows took the shine off the news.

The FTSE 100 company said outflows in the third quarter reached £2.3bn, sending its shares tumbling.

It said the growth in the year-to-date was supported by net inflows totaling £1.6bn for the first nine months of the year, bolstered by positive market conditions and investment performance.

Assets under management excluding joint ventures and associates rose to £663.8bn, although joint ventures and associates saw negative net flows in the quarter due to ongoing market volatility in China.

The year-to-date figure, however, remained positive at £5.2bn.

In asset management, Schroders recorded growth in private markets, but foreign exchange fluctuations offset that increase.

Net outflows in its solutions division slowed compared to prior quarters, while demand for fixed income strategies in mutual funds drove a shift in the assets under management mix.

Institutional flows remained stable, although the company anticipated a fourth-quarter outflow of around £8bn from the legacy Scottish Widows mandate in solutions, as well as around £2bn in notified outflows from three institutional clients.

Wealth management also saw positive net flows, primarily within the advised segment, driven by momentum in Cazenove Capital.

Conversely, the managed business faced outflows following a client's decision to bring assets in-house.

Despite the movements, Schroders said it expected to meet its target of 5% to 7% net new business growth of opening assets under management annually.

The company said it was optimistic about future mandates in asset management, as it continued to navigate challenges related to market conditions and client-driven outflows.

"AuM has reached £777.4bn, with positive net flows in the first nine months of the year of £1.6bn," said chief financial officer Richard Oldfield.

"Clients continue to benefit from the strength of our diverse client proposition, notably in the third quarter in our mutual funds business and Cazenove Capital.

"As the new group CEO, I will be leading a business with a strong investment franchise, deep client relationships, exceptional talent and significant potential for profitable growth."

Oldfield said standing still was "not an option" for Schroders in the current, "fast-changing" market landscape.

"We must focus to grow, build greater commercial discipline and drive efficiencies through simplification and flawless execution."

At 0833 GMT, shares in Schroders were down 11.94% at 320.4p.

Reporting by Josh White for Sharecast.com.