Schroders Private Assets Business Offers Beacon Amid Falling Profits And Assets

Offering access to private equity, private debt, infrastructure and real estate, the firm's private arm was brought under a single brand in June 2021 and has continued to boost AUM through both organic and inorganic growth, according to the firm's full year results to 31 December 2022.

In 2022, fee earning AUM increased 32% to £68.4bn, while AUM plus non-fee earning dry powder hit £72.3bn, up from £54.2bn.

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This growth was mainly down to a strong fundraising year, up 41% on 2021's figure to £17.5bn, which softened the slight decline of net new business, down £500m on the previous year.

Schroders Capital's real estate capability enjoyed £5bn of net inflows over the period, while the acquisition of Cairn Real Estate and a 75% stake in Greencoat Capital added £8.8bn inorganic growth.

Acquisitions also rescued asset growth at the firm's solutions arm, with the £43.1bn AUM addition of River & Mercantile's solutions business helping nudge Schroders Solutions AUM up 2% to £210.2bn, which now represents 29% of group AUM.

The firm's more traditional public markets business suffered heavy losses, with profits and AUM down on 2021.

Mutual funds saw net outflows of £5.9bn, returning most of 2021's £8.1bn inflows, while the institutional arm also suffered, with two large mandate losses leading to £7.3bn of net outflows.

As a whole, Schroders Asset Management suffered net outflows of £6.2bn, down heavily from 2021's net inflows of £20.2bn.

Net profits across Schroders AM fell 17% to £593m, reflecting the experience of the wider group, which saw profits drop 14% to £723m.

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The firm recommended a final dividend of 15 pence per share, making a total dividend of 21.5 pence per share for the year, a slight increase on 2021's 21.4 pence per share.

Peter Harrison, group chief executive of Schroders, said he was encouraged by "resilient performance", which indicated the firm's "strategy is working".

He added the strength of the group is underpinned by its approach to sustainability, adding the move had been "the right decision" before confirming they will continue to invest in ESG.

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