AUM at Schroders still on the rise

Clients continued to put investment funds under the jurisdiction of asset manager Schroders during the third quarter, but the group is seeing a slowdown in Institutional flows.

Assets under management (AUM) at the end of September stood at £202.8bn, up from £194.6bn at the end of June, with a chunk of the gain down to net inflows of £2.6bn. The Institutional business saw net inflows in the third quarter of £1.9bn while Intermediary funds saw a net inflow of £0.8bn but Private Banking saw a net outflow of £0.1bn. For the first nine months of 2012, net inflows were £5.3bn (2011: £5.1bn).

The group said it expects to see a slowdown in Institutional flows in the short term but, on the bright side, demand in the Intermediary business has picked up, though it is not clear whether this improvement will be sustained, given the uncertain economic background.

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Asset Management net revenue for the third quarter declined to £246.0m from £256.8m the year before, while profit before tax tumbled to £85.8m from £92.7m in the third quarter of 2011. For the first nine months of 2012, Asset Management profit before tax was £261.0m (2011: £295.8m).

On the Private Banking side, net revenue for the three months to September 30th was £24.6m, down from £29.3m the year before, and profit before tax was £4.0m, down from £6.7m a year earlier. For the first nine months of 2012, Private Banking profit before tax was £14.4m (2011: £19.0m).

What Schroders calls the Group Segment, which comprises central costs and returns on investment capital (including seed capital in new products), saw a loss before tax of £1.2m, versus a profit of £2.2m the year before, offset by £1.6m of investment gains through reserves. For the first nine months of 2012 the loss before tax of the Group Segment was £9.4m (2011 profit: £2.5m), offset by £8.9m of investment gains through reserves.

JH