Schroders CEO keeps the gloom at bay

“You can’t read much into one quarter, but the short-term trend is encouraging. I can’t say I’m as gloomy as some,” Harrison said on November 3.

He was speaking after Schroders reported that assets under management had risen to a record £375 billion in the third quarter, largely due to strong investment returns and a weaker pound.

Net inflows were subdued but positive in what Harrison described as a “solid” quarter.

Net inflows from retail intermediaries were £1.1 billion over the quarter, against net outflows of £200 million a year ago. Institutional inflows were £1 billion, against net outflows of £100 million a year ago. Over the nine months to September, institutional inflows were £5.4 billion, against £3.5 billion during the same period in 2015.

Harrison said: “We’ve seen a recovery in demand for commodities and emerging markets. Progress for bonds have been encouraging, along with global equities following team changes.”

He added he expects a boost in the fourth quarter from the marketing of funds through US insurer Hartford and progress in the management of insurance portfolios in Europe under the Solvency 2 regulatory regime.

He was also upbeat on the prospects for high-net worth management following the acquisition of C. Hoare’s wealth division and did not rule out further niche deals, plus the development of sophisticated robo advisory strategies to serve the sector.

Analysts at JP Morgan Cazenove said in a research note: “We believe the robustness of flows and performance reflects Schroders’ diversity and it remains the only traditional asset manager in our universe with an over-weight rating.”

Schroders posted pre-tax profits of £153.9 million for the quarter, ahead of a broker consensus of £155.4 million and £148.6 million in the same quarter of 2015.

Schroders shares were up 1.26% at 9 am GMT.

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