Schroders experienced £2bn of net outflows in the three months to June 30 2016, including £1.5bn of net outflows from the intermediary section of its asset management business.
In spite of the outflows, including £100m from institutional and £400m from wealth management, the firm’s assets under management increased in the quarter from £324.9bn to £343.8bn following £20.9bn of investment returns, £17bn of which it attributed to the weakening of sterling.
Assets under management in the intermediary division increased in the quarter from £102.1bn to £106.4bn, while the asset management business as a whole saw assets increase to £310bn.
The half year results showed over the six month period to June 30 the intermediary division recorded net outflows of £3.3bn, along with outflows of £400m from wealth management, that were offset by inflows into the institutional section of £4.4bn resulting in overall net inflows of £700m.
Net operating revenue for the asset management division for the six months was £687.8m, slightly below the £692.9m recorded in the same period in 2015, while profit before tax reached £249.1m, compared with £265m for the first half of 2015.
Schroders noted in the results: “Volatile markets continued to weigh upon investor sentiment within the intermediary channel, particularly in the UK and Asia.”
Meanwhile in the wealth management business net operating revenue increased slightly to £107.1m in the first half compared to 2015, while profit before tax grew to £28.4m and assets under management increased to £33.8bn from £32bn at the end of June 2015.
Peter Harrison, group chief executive, commented: “There was heightened market volatility throughout the period, particularly towards the end of June, following the result of the referendum on the UK’s membership of the European Union. We expect the current market environment to persist and this may have an impact on investor demand. Our diversified business model continues to perform well and we are well placed to create value for our clients and our shareholders over the long term.”