Schroders’ mutual funds saw £2.9bn in net outflows in the first half of the year, driven by investors fleeing fixed income products in the “risk off” environment.
In a statement to the stock exchange this morning (July 28), the group said despite this drop, £600mn was invested into the company’s equity products in the six months to June 30, which chief executive Peter Harrison said was down to the group’s sustainable offerings.
Assets under management for the mutual funds fell from £116bn in 2021 to £103bn at the end of June.
Fund houses have struggled to maintain their AUM in the first half of the year as rising inflation, geopolitical tensions and the shadow of a recession destabilise markets.
Harrison said the increased risk of a global recession has had an “inevitable impact” on the business.
He outlined the firm’s strategy as building closer relationships with end clients, expanding capabilities in private assets, and growing core asset management.
The latter will be achieved through geographic expansion, strategic partnerships and sustainable investing, he said.
Overall AUM rose to £773bn from £767bn in 2021, buoyed by the acquisitions of a majority stake in renewable infrastructure manager Greencoat Capital, and River and Mercantile’s solutions business.
The two purchases added just over £50bn in AUM.
The solutions business highlighted two new strategic client mandates won since the acquisition, a partnership with Lloyd’s of London and as the outsourced chief investment officer of Centrica’s pension schemes.
Advised assets under management dropped from £61bn to £59bn, despite inflows of £3bn, as the volatile markets pushed investment returns £5bn lower.
Platform assets also dropped, from £19bn to £17bn, contributing to an overall 6 per cent drop in wealth management AUM to £96bn.
Pre-tax profit declined 16 per cent to £313mn.
The company said it expects the backdrop for public and private markets to remain difficult, and said it will continue to invest in its broad investment platform offering.
“We have built a strong, diversified business, both in terms of geographical reach and product offering, while our strategic initiatives have delivered growth and improve our resilience.”