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Schroders seeks to cut institutional outflow

UK – Michael Dobson, chief executive at asset management firm Schroders, says the company’s top priority is to reverse a multi-billion pound outflow of institutional assets.

Schroders has lost billions of pounds of institutional assets under management in the last few years, hit by the move away from traditional balanced mandates. Management have sought to downplay the significance of the withdrawals, saying the mandates were “low margin” and that retail was becoming more important.

In an investor presentation today, Dobson put “reversing institutional outflows” at the top of seven priorities for the firm going forward. In 2004 it lost a total of £8.4bn of such assets.

A spokeswoman said Dobson had not outlined a plan to solve the problem at the meeting. But she quoted him as saying that institutional remains at the core of firm and that he doesn’t regard it as an “ex-growth” business. She pointed to the company’s ability to win specialist mandates.

“The institutional business had a mixed year,” board member Massimo Tosato told IPE last month. Tosato, head of distribution, said the firm is working to reduce the impact of the shift away from balanced mandates.

He said the firm has around £15bn remaining in such ‘multi-asset’ portfolios. It is developing a so-called ‘new balanced’ model. “You will not find a complacent business at Schroders,” he added.

Other issues identified by Dobson included: building retail, capacity management, Europe and Asia, private bank, the US and the deployment of surplus capital.

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