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Profits Fell At Schroders

Tom Burroughes

31 July 2020

Profits before tax and one-off issues fell by 10 per cent to £306.2 million ($339.8 million) at in the first half of 2020, the UK-listed wealth and investment house said yesterday.

Exceptional items were £26.1 million (H1 2019: £21.1 million), mainly covering the amortisation of acquired intangibles. 

Assets under management rose by 5 per cent to close the period at a new high of £525.8 billion (31 December 2019: £500.2 billion), in spite of significant market weakness towards the end of the first quarter as the pandemic struck.

The firm logged net inflows of £38.1 billion in the first half of 2020 (H1 2019: net outflows were £1.2 billion). 

Net operating revenue fell 2 per cent to £971.6 million (H1 2019: £993.3 million), which includes performance fees and net carried interest of £18.9 million (H1 2019: £27.4 million). 

Net income declined 3 per cent to £1,003.9 million (H1 2019: £1,032.6 million). This was partially offset by continued strong performance from our joint ventures and associates, which contributed £27.6 million in the first half of the year (H1 2019: £14.1 million).

Asset management net income before exceptional items fell 3 per cent year-on-year to £835.6 million, including performance fees and net carried interest of £18.4 million.

Assets under management in the Private Assets & Alternatives business area closed the period at £45.3 billion, up from £44.2 billion at the end of 2019. 

Schroders said clients continued to show demand private assets strategies, such as real estate, private equity and infrastructure, offset by outflows from more liquid alternatives, such as emerging market debt absolute return and its GAIA range of UCITS-compatible hedge funds. Overall, there were small net outflows of £0.4 billion in the first half of 2020 (H1 2019: £0.4 billion outflows).