Schroders reported a slide in profits today as it booked a heavy restructuring bill last year and weathered “one of the most challenging years” for money managers “in recent times”.
In its full year results this morning, the FTSE 100 funds group said pre-tax profits slid to £487.6m from £587m in 2022.
This comes as the firm booked restructuring costs of £86.2m after reducing its office footprint and “rationalising software”, relocating wealth management roles and cutting jobs.
Assets under management grew to £750.6bn in 2023, up from £737.5bn a year prior, on the back of an uptick in new business and positive investment performance.
Boss Peter Harrison described the year as “one of the most challenging years for global active asset managers in recent times” and warned that geopolitical jitters and elections would continue to roil the markets this year.
“Looking forward, the markets remain unsettled because of geopolitical uncertainty in a year of electoral change,” Harrison said.
Schroders was “in a strong position to capitalise” on interest rates falling and the “rotation of clients’ assets back into risk assets”, he added.
London’s money managers have suffered a turbulent 12 months as interest rates and inflation have weighed on the markets and unnerved investors.
The firm said it had delivered net new business of £9.7bn over the year, as bumper flows of £23.1bn into its wealth management, private markets and solutions business were offset by a downturn in its public markets business.
Schroders public markets arm was hit by net outflows of £13.4bn as it suffered from the allure of risk-free returns in cash. Rapid rate hikes from the Bank of England have made cash a more appealing prospect to investors over the past year.