UK – Schroders says it lost four billion pounds (5.9 billion euros) in balanced mandates in the first half as UK clients continued to restructure their portfolios – but added the revenue impact is “limited”.
It posted a total net outflow of institutional funds of 4.5 billion pounds in the first half of 2004, which followed a 2.5 billion pound-institutional outflow in the same period last year.
It said: “Restructuring by clients from balanced and multi-asset mandates contributed to a net outflow of four billion pounds in the UK.” It also had outflows from North America, though it had one billion pounds of inflows from Asia-Pacific and continental Europe.
Institutional assets under management have fallen to 68.4 billion pounds from 71.4 billion pounds at the end of 2003 – although total assets under management rose to 100 billion pounds from 98.9 billion pounds.
“We continue to see a fundamental change in the mix of our business,” the 200-year-old firm said. “Low margin balanced and multi-asset institutional mandates are restructuring which results in an outflow of funds but a limited impact on revenues.”
“On the other hand we are winning new mandates at higher margins in specialist equity and fixed income due to our investment performance and product innovation. We expect this to continue.”
First-half asset management profit after exceptional items more than doubled to 54.7 million pounds from 23.8 million pounds a year ago.
The group’s total pre-tax profit rose to 60.8 million pounds from 27.2 million pounds, with revenues up 19% at 240.4 million pounds.