Schroders Records £2b Outflows Fuelled By Brexit

The UK’s largest listed asset manager says increased market volatility may limit demand for its funds.

UK asset manager Schroders has been hit by the heaviest outflows from its funds since the height of the financial crisis, blaming last quarter’s withdrawals on the difficult market environment following the UK’s vote to leave the European Union.

Largest Outflows Since 2009

Schroders reported £2 billion ($2.6 billion) of net outflows in the three months to the end of June, its largest since 2009, and nearly double the amount analysts had anticipated, according to figures released by the Financial Times.

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Schroders chief executive Peter Harrison said: “There was heightened market volatility throughout the period, particularly towards the end of June, following the result of the referendum on the UK’s membership of the European Union. We expect the current market environment to persist and this may have an impact on investor demand.”

Assets Hit Record High

Despite the outflows in the second quarter, which Schroders blamed primarily on withdrawals from wealth management and intermediary clients such as financial advisers, the company’s total assets under management rose to an all-time high of £343.8 billion ($453.2 billion).

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The asset increase was largely because of the weaker sterling following the Brexit vote, which helped lift the company’s assets by £28.5 billion ($37.6 billion).

Schroders’ profits for the first half of the year were £282.3 million ($372.1 million), slightly below 2015 levels, while net inflows for the first half of the year of £700 million ($922.7 million) were significantly lower than the £8.8 billion ($11.6 billion) of inflows recorded during the same period last year.

Henderson, the FTSE 250 Anglo-Australian asset manager, also recorded its second consecutive quarter of net outflows, with investors withdrawing £1.4 billion ($1.8 billion) from its funds in the three months to the end of June.

Henderson reported pre-tax profits of £100.5 million ($132.5 million) in the six months to the end of June, down 14 percent on the same period a year ago, on the back of £2 billion ($2.6 billion) of outflows over the period.

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