British fund manager Schroders has registered a 15% increase in assets under management (AUM) last year in spite of the economic uncertainty caused by the Covid-19 pandemic.
The company’s AUM rose to £574.4bn in 2020 from £500.2bn a year ago.
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Schroders Group chief executive Peter Harrison attributed rise in AUM to the strong demand in its private assets, wealth management and solutions businesses, which currently accounts for 54% the firm’s AUM.
Meanwhile, Schroders recorded a profit before tax and exceptional items of £702.3m, while net inflows to £42.5bn from £43.4bn last year.
The company’s partnerships, majorly in Asia, generated a further £12.4bn of net inflows, bringing total net flows to £54.9bn AUM including partnerships reached £663.0bn.
Net income increased by 3% to £2.18bn as against £2.12bn in 2019.
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By GlobalDataAsset Management
Asset Management net income before exceptional items for the year stood at £1.78bn, up from £1.78bn last year. The business saw a higher contribution from joint ventures and associates of £49.5m.
Profit before tax and exceptional items was £573.3m and profit before tax was £543.5m.
Private Assets & Alternatives
The AUM within Private Assets & Alternatives rose at a compound annual growth rate of 21% in the last five years, recording £46.1 bn in asset the close of 2020.
Schroders said the business attracted good client demand for securitised credit, infrastructure finance, real estate and private equity during the year.
Furthermore, it said that the acquisition of real estate investment manager Pamfleet enabled it to expand its geographical capabilities within Real Estate into Asia.
Wealth Management
Schroders witnessed strong revenue growth and continued client demand for its wealth management arm during 2020.
The unit generated net new business of £1.7bn last year as against £14.7bn the year before.
Schroders Personal Wealth recorded net outflows of £0.2 bn, down from the £12.6bn in 2019.
The total AUM for Wealth Management grew to £72bn during the year from £66.7bn in the previous year. The unit also witnessed a 24% rise in the net income to £382.7m.
Profits before tax and exceptional items increased by 26% to £110.5m and profit before tax increased to £64.8m.
Outlook
Schroders said that the group is increasingly balanced towards the higher growth areas of Private Assets & Alternatives, Solutions and Wealth Management.
The company expects the macro-economic environment will accelerate demand for these areas in the future, while hoping to maintain strong capital position to generate value for its clients, shareholders and wider stakeholders.
Last month, reports suggested that Schroders secured the clearance to launch a majority-owned wealth management JV with a unit of Chinese lender Bank of Communications (BOCOM).
