Schroders inflows rise to £4.5bn despite Buxton outflows

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Schroders witnessed net inflows of £4.5bn in the first half of 2013 despite being hit by a £1.1bn net outflow in June after the departure of Richard Buxton and the market sell-off.

The asset manager’s half-year results to 30 June 2013 show net inflows over the six months were up 66.7 per cent from the £2.7bn seen in the same period of 2012. Net inflows in intermediary business stood at £2.7bn.

Schroders’ net inflows were £5.6bn in the first quarter, which was followed by £1.1bn of net outflows in the second quarter – all of which occurred in June. Schroders says most of June’s outflows were mainly from retail investors, which is claims was “in line with most of the industry”.

June was marked by investors pulling money from investments after Federal Reserve chairman Ben Bernanke suggested the central bank could taper its $85bn-a-month bond-buying programme and mounting fears over the slowdown in China.

In addition, Schroders saw UK equity manager Buxton depart the firm to move to Old Mutual Global Investors. Buxton’s Schroder UK Alpha Plus fund has seen its assets fall from £3.6bn to £2.2bn at the end of June.

The firm’s assets under management rose to £235.7bn at the end of 2013’s first half, up 21 per cent from the £194.6bn posted at the same period in 2012. This includes £6.6bn from the acquistion of STW Fixed Income over the period.

In the group’s asset management arm, some £79.2bn is in intermediary business, up from £72bn at the start of the year, while £139.6bn is managed in institutional money.

Profit before tax rose to £221.7m for the six months. The firm also hiked its interim dividend 23 per cent to 16p a share.

Schroders chief executive Michael Dobson says: “We are pleased with these strong results and the overall performance of the firm, reflecting the benefits of our diverse, global business. Against a volatile background, we delivered competitive performance for clients, £4.5bn of net new business and a 29 per cent increase in profit.”

He adds: “We are confident that the additions of Cazenove Capital in the UK and STW Fixed Income in the US will strengthen our offerings for clients and create value for shareholders.”

However, Dobson describes the acquisition of both these businesses as “one-offs” and says the firm is unlikely to make any more acquisitions in the near future as it focuses on an organic growth strategy.