In simple terms, when equity markets are high then demand from institutional investors tends to fall, while the opposite is true on the retail side, says Schroders (SDR) chief financial officer Richard Keers. However, during the first half, business was sluggish on both fronts for the asset manager. A downturn in demand from European retail investors resulted in £0.2bn in net outflows from the intermediary channel, and although the institutional business recorded matching net inflows, that’s a far cry from the £1.4bn it reported in the same period last year.
Yet, despite negative market returns of £2.3bn, overall assets under management rose marginally to £449bn. That was thanks to the wealth management business, which gained £1.2bn in net inflows, including £0.7bn from last year’s acquisition of US investor Benchmark Capital.
For the institutional asset management business, outflows in continental Europe and Australia were offset by stronger demand in Latin and North America, where the asset manager has historically been under-represented. Equity mandates also declined, while private assets and alternatives proved more popular. As part of its strategy to diversify the business more into private assets, the group acquired pan-European hotels investment and management business Algonquin Management Partners in May, adding £1.6bn in institutional assets.
Analysts at Numis expect adjusted pre-tax profits of £793m during the year to December 2018, giving EPS of 226p (from £800m and 224p in 2017).
| SCHRODERS (SDR) | ||||
| ORD PRICE: | 3,101p | MARKET VALUE: | £8.76bn | |
| TOUCH: | 3,101-3,102p | 12-MONTH HIGH: | 3,784p | LOW: 3,069p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 1,247p* | |||
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 1.18 | 343 | 97.8 | 34 |
| 2018 | 1.34 | 371 | 106 | 35 |
| % change | +14 | +8 | +8 | +3 |
| Ex-div: | 16 Aug | |||
| Payment: | 20 Sep | |||
| *Includes intangible assets of £929m, or 329p a share | ||||
