Schroders profits up but investors cash in gains - UPDATE

7th Nov 2013 13:10

- Third quarter profits up- Assets under management reach 256.7bn pounds- Shares retreat after strong runSchroders reported a sharp rise in third quarter profits helped by its recent acquisition of Cazenove Capital.The fund manager said pre-tax profits rose to £106.2m in the three months to the end of September from £88.6m in the same period last year on the back of revenues which rose to £366m from £276.5m. Funds under management increased to £256.7bn at the end of September from £235.7bn at the end of June following a £20.1bn boost from the acquisition of Cazenove Capital and £1bn of net inflows.Chief Executive Michael Dobson said: "Cazenove Capital has materially strengthened our wealth management business and added to our capabilities in equities, multi-manager and fixed income and generated net inflows of £0.7bn in the third quarter."Schroders' asset management division saw clients pour a net £1.7bn into its funds in the three months to the end of September but its wealth management division had suffered a £0.7bn net outflow following the loss of a large custody account. But shares in the company were leading the FTSE 100 fallers, down 3% at 2,528p at 12:50 on Thursday.Richard Hunter, head of equities at Hargreaves Lansdown, said: "The results were fine. I think the fall needs to be taken in the context of the 65% rise in share price in the last year."Canaccord Genuity analyst Arun Melmane downgraded the stock to hold saying "valuations now look full in the absence of stronger growth within the franchise."TB