Schroders loses E2.6bn in institutional business
UK – Schroders said it lost 1.8 billion pounds (2.6 billion euros) of institutional business in the third quarter – although asset management has swung into profit.
Its total funds under management rose four percent to 94 billion pounds due to rising markets – though this was offset by net outflows.
Net outflows were 1.2 billion pounds in the quarter, with net retail inflows of 0.9 billion pounds countered by institutional and private banking outflows of 1.8 billion pounds and 0.3 billion pounds respectively.
“At the time of the interim results announced on September 2 2003 we expressed caution about fund flows and, with on-going restructuring from balanced to specialist mandates in the UK and outflows from our Americas business, we expect net outflows for the year as a whole,” the firm said.
Schroders said asset management profits, after project expenditure and redundancy costs, were 15.4 million pounds (euros) in the third quarter, which compares to a loss of one million pounds in the same period a year ago.
Redundancy costs this year are now projected at around four million pounds, against previous the previous estimate of 2.3 million pounds.
Asset management revenues rose to 107.7 million pounds from 99.2 million pounds. Underlying asset management profits were £21.3 million for the quarter against £11.4 million in the third quarter of last year.
Private equity made a profit of 3.5 million pounds, compared to a loss a year before of 7.3 million pounds.
The group’s overall profit, before goodwill amortisation and tax, was 18.0 million pounds, compared to a loss of 9.4 million pounds.
“Going forward, we see a range of growth opportunities and we will continue to invest for the medium term, taking advantage of our strong financial position and the significant reduction in costs achieved over the past two years.”