Schroders slows profits slide as client cash inflows recover
RISING inflows of cash, particularly from institutional investors, allowed fund manager Schroders to slow its profit slide in the third quarter.
Schroders yesterday reported surprisingly strong interest from investors in the second half of the year, with net inflows of £7bn in the three months to 30 September.
While £3.7bn was raised from retail investors, it was the £3.3bn from institutions that grabbed most attention, signalling a strong turnaround from the huge outflows to institutions earlier in the year.
Chief executive Michael Dobson said funds under management rose to £138.9bn compared to £113.3bn at 30 June.
The £7bn net inflow was £3.1bn higher than the second quarter, more than erasing the £2.1bn outflows in the first quarter.
The enthusiasm from investors surprised analysts who had anticipated less than £2bn from institutions. Credit Suisse had tipped a total of £4.7bn in inflows.
The improving investment outlook helped Schroders put the brakes on its recent profit dive, with pre-tax profit in the third quarter down 19.2 per cent to £57.8m.
The result was received warmly in the City. Roddy Wallace, an analyst at Barclays Wealth, said: “Although the group is a natural beneficiary of rising markets, the strong inflows suggest a good operational performance.”
Julius Baer said income was £177.5m down from £188.1m in the third quarter of 2008. The division spent a one-off £1.3m on staff redundancies. Income from the group’s Private Banking division was £23.6m, down from £29.0m at the same juncture last