Alternatives adds £5bn to Schroders net inflows while mutual funds leak cash

According to its half year results, Schroders recorded net inflows of £8.4bn, with private assets and alternatives adding £4.8bn to the total, behind only its solutions business, which added £6.3bn, benefiting strongly from this year’s acquisition of River and Mercantile’s solutions arm.

Wealth Management also boosted the group’s inflows, adding £3.8bn.

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Mutual funds suffered from widespread negative market sentiment, losing £2.9bn to net outflows over the past six months, while institutional haemorrhaged cash, with £7.6bn exiting through this arm.

Equity mutual funds kept their head above water, managing to stay in net positive territory, buoyed by the firm’s sustainability offering. The Global Sustainable Value fund was Schroders’ second best-seller over the period.

Overall assets under management bucked the wider industry trend and rose slightly, from £767bn to £773bn, although without the acquisitions of R&M’s solutions business, Greencoat Capital and Cairn Real Estate, the figure would have fallen sharply, as the inorganic growth added £52bn to the total.

Profit before tax fell over the first half of the year compared with the same period in 2021, down 16% to £313m.

Asset management net operating income rose slightly on the larger AUM, up by £14m to £1bn, although operating profit took a hit, down to £329m.

The board has maintained its interim dividend at 37 pence per share, to be paid on 25 August 2022.

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Schroders group chief executive Peter Harrison said: “We have built a diversified and resilient business that has weathered difficult market conditions, can fund growth and has put us in an excellent position to serve our clients.

“The fact that we can report positive net new business in this period is testament to this. Our investment in sustainability has been a critical contributor to our success. It was particularly evident in our mutual fund business where, despite a stock market sell-off, our equity funds saw positive client inflows.

“Our private assets, wealth and solutions businesses are growing well, reinforcing the value of our strategic focus. It is this diversification that enables us to continue to meet our clients’ evolving needs.”

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