Schroders's investment performance hammered in a bruising 2018

7th Mar 2019 07:42

(Sharecast News) - Fund manager Schroders reported a drop in assets under management and full-year profits after a bruising year, but nevertheless beat analysts estimates' on both metrics, allowing management to bump-up the payout.Over the year ending on 31 December, the firm recorded a 6% drop in AuM to £421.4m (consensus: £413.3bn), amid £9.5bn of net outflows.Profits before and tax and pre-exceptional items meanwhile declined by 5% to £761.2, on a 3% rise in net income to £2,123.9m.Commenting on the results, group chief executive, Peter Harrison, said that management was "delighted" with the more than £85bn of notified net new inflow, going on to highlight the "strong" demand from its Wealth Management clients and its new partnership with Lloyds Banking Group.Harrison also called attention to the fund manager's expanded footprint and capabilities in North America and Private Assets and Alternatives, two key of the firm's key areas of strategic growth.AuM at its asset management arm fell from £389.8bn at the start of the period to £363.5bn by period-end, while in Wealth Management they dipped from £45.9bn to £43.7bn, but with the decline in the latter the result of disposals and negative investment returns.Schroders' investment performance deteriorated rapidly in 2018, with only 43% of its assets outperforming over the course of the latest 12-month period, versus 70% in 2017.That dragged down its five-year investment outperformance from 84% to 76%.In parallel, the group's ratio of total costs to net income increased from 61% to 64%."Our diversified business model and global footprint mean we are well positioned to grow the business over the long term," management said in a statement."There are headwinds facing the industry, but we remain confident in our ability to identify new opportunities across the regions and asset classes in which we operate. We will continue to invest behind these and maintain the long-term strength of our business."The board recommended keeping the final payout per share at 79.0p, for a full-year dividend of 114.0p, versus expectations for an unchanged dividend of 113.0p.