Schroders posts £5.1bn inflow on institutional strength

Asset under management at Schroders have hit new record as the fund firm managed to register a £5.1 billion inflow in the six months to the end of June.

Assets jumped from £196.7 million to £204.8 billion with pre-tax profit jumping 15% to £215.7 million, which was another record high for the group, which is led by chief executive Michael Dobson (pictured). This prompted the group to raise its interim dividend from 11p  to 13p 

Within asset management revenue increased 12% to £534.6 million, which included £13.8 million of performance fees. However, net revenue margins, excluding performance fees, were down from 59 basis points to 57, which the group said reflected the continued growth of its institutional arm.

Inflows in institutional were £4.6 billion with a high level of new business won in multi-asset strategies with the group also enjoying 'good' inflows in equities and fixed Income. The group said it had positive net flows in all regions with a particularly strong performance in the UK and continental Europe. Assets under management with institutional rose from £106.4 billion to £112.7 billion.

However, Schroders retail business founded the going tougher as retail investors were reluctant to commit funds in the face of macro economic uncertainties with net inflows sliding from  £5.1 billion in the first half of 2010 to £0.4 billion. 'We also saw a tailing off of flows into a number of strategies which we have closed for capacity reasons. As a result, although we had positive net sales in both the first and second quarters, they were considerably lower than the high levels achieved in 2010,' the group said.

Assets under management in the intermediary business stood at £75.4 billion at the end of June versus £74.1 billion in the previous year.

Meanwhile private banking revenue rose 16% to £58 million thanks to no loan loss provisions. Pre-tax profit jumped 86% to £12.3 million, although inflows slipped back from £1.2 billion to £0.1 billion. Assets under management at the division rose from £16.2 billion to £16.7 billion.   

'As long as markets are held back by a range of macro economic concerns, Intermediary demand and opportunities in private Banking are likely to remain muted, but we are well positioned for a recovery with strong investment performance and a broad product range. We continue to see good prospects for growth in Institutional,' the group said.