Table of Contents
- Business exits from joint ventures and associates partially offset market gains
- Schroders informed of £10bn institutional mandate losses
Schroders shares sank on Tuesday as the fund manager blamed Chinese market volatility on £2.3bn of net investor outflows and flagged the loss of large institutional mandates.
The group had total assets under management of £777.4bn as of September 30, up from £773.7bn three months earlier, largely thanks to £6bn in gains from market performance and exchange movements.
This helped offset £2.6bn in net outflows from its joint ventures and associated businesses, and £2.7bn from its solutions unit during the period.
Schroders said it remains on track to achieve its net new business target of between 5 percent and 7 percent of operating assets under management per year.
Schroders said the quarter’s net outflows from joint ventures and associates, which still recorded net inflows of £5.2bn in the first nine months of the year, were related to “continued market volatility in China”.
Investors are nervously awaiting a Chinese government meeting later this week, amid hopes of another extraordinary stimulus package to revive the world’s second-largest economy.
Foreign investment in the country has stagnated as Chinese growth has faltered following a prolonged real estate slowdown.
Schroders’ asset management unit was boosted by £5.4bn in market gains during the period, but Schroders warned it had been notified of an £8bn exit from a legacy Scottish Widows mandate.
Three separate institutional clients will get a further £2bn.
Schroders said it remains on track to achieve its net new business target of between 5 percent and 7 percent of operating assets under management per year.
But Schorders shares 13.9 per cent to 313.2 pence by late morning, bringing 2024 losses to around 26.4 per cent.
Chief financial officer Richard Oldfield, who will become the group’s next chief executive following the departure of Peter Harrison, said: “As the new group chief executive, I will lead a business with a strong investment franchise, deep client relationships, talented exceptional and significant potential for profitable growth.
‘I will do whatever it takes to realize this potential.
‘Standing still is not an option for Schroders in today’s changing market landscape. We must focus on growth, develop greater commercial discipline and drive efficiency through simplification and flawless execution.”
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