Schroders profits surge to £836m as money manager reaps benefits of booming mutual funds demand
- The company also generated net new business of £35.3 billion
- Its assets under management increased by 10% to a new high of £731.6 billion
- CEO Peter Harrison highlighted the company’s commitment to sustainability
British money manager Schroders has reported a 19 per cent jump in annual profit, helped by stronger performance fees and growing client demand at its mutual funds division.
Profit before tax and exceptional items climbed to £836.2million in 2021, from £702.3million a year earlier.
Meanwhile, the company generated net new business of £35.3billion, representing an annual organic growth rate of 5 per cent, and its assets under management increased by 10 per cent to a new high of £731.6 billion.
British money manager Schroders has reported a 19% jump in annual profit, helped by stronger performance fees and growing client demand at its mutual funds division
Reflecting the group’s strong financial performance, the board has recommended a final dividend of 85p per share, bringing the total dividend for the year to 122p.
This represents a 7 per cent increase compared to 2020. The final dividend will be paid to shareholders on 5 May.
Commenting on the results, group CEO Peter Harrison, said: ‘2021 was an important year for Schroders.
‘These results benefitted from the strategic decisions we took several years ago, improving both the resilience of our business and its long-term growth potential.
‘Delivering excellent investment performance is always our primary focus; it was pleasing that 79 per cent of assets outperformed on a three-year basis.
‘Importantly, the areas where we have invested for growth have delivered strongly.
‘Performance across our partnerships, wealth, private assets and our sustainability franchise accelerated and enabled us to better serve a wider group of clients.’
Looking ahead, the business is focused on ‘three clearly defined priorities to drive future revenue growth’.
This includes actively growing the wealth management business, tilting the asset management business towards the ‘fast flowing waters of our industry’ and, thirdly, expanding its private assets and alternatives capabilities.
Mr Harrison also highlighted the company’s commitment to sustainability and impact investment.
Last December Schroders struck an agreement to purchase a 75 per cent stake in green finance specialist Greencoat Capital. This transaction is set to complete in the second quarter of 2022.
Greencoat will become part of the group’s private markets division, Schroders Capital, and will be known as Schroders Greencoat.
Other environmental commitments made by Schroders include buying a majority stake in impact investment manager BlueOrchard in 2019 and launching the Schroder ISF BlueOrchard Emerging Markets Climate Bond fund not long afterwards.
It followed this up a year later when it collaborated with Big Society Capital to set up the BSC Social Impact Trust, which raised gross proceeds of £75million in its initial public offering, though this was £25million short of its target.
The company concluded: ‘We believe asset managers have a fundamental role to play in supporting companies in their transition to net zero.
‘We have now published our own path to net zero, not only for our business, but also for our clients’ investment portfolios. We intend to use science-based targets to demonstrate a clearly defined pathway to net zero.’