Schroders has reported pre-tax profit up 23% to £760.2m for the past year, as both AUM and net income grew.
Net income before exceptional items was up 15% to £2.069bn, while assets under management grew 13% to £447bn (€504bn) by the end of December 2017. Net inflows hit £9.6bn (€10.8bn), up from £1.1bn (€1.2bn) the previous year.
Peter Harrison, group chief executive, noted that the drivers of profit included both organic growth and acquisitions – such as Switzerland based Adveq. Looking forward, he also said he expected “good progress” in areas such as private assets, wealth management and business in North America.
“There are headwinds facing the industry but we continue to believe that there remain opportunities for growth. Our diversified business model, ongoing focus on costs, strong financial position and willingness to invest mean that we continue to be well placed,” he added.
In the asset management business in particular, pre-tax profit before exceptional items rose 23% to £705.9m. The net inflows from asset management clients hit £7.6bn, up from £1.4bn the previous year.
Performance fees rose to £77.5m (€87.5m) from £38.8m (€43.8m) the previous year. Of that, some £57.6m came from institutional clients and £19.9m from intermediary sales.
Although Schroders reports that net operating margin revenue from institutional business remained the same as in 2016, it added that it saw higher margins from its private assets and alternatives business, through the acquisition of Adveq.
Key demand areas for the institutional business included multi-asset, private assets and alternative strategies.
In the intermediary channel, demand was high for branded funds, although there were outflows on a net basis from sub-advisory mandates.
To view the full figures reported click here: http://www.schroders.com/en/sysglobalassets/digital/global/media-relations/7-annual-results-2017—data-pack.pdf