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Schroders dives as £1.1bn outflow overshadows strong first half
Shares in Schroders have dived as a £1.1 billion outflow in the second quarter overshadowed a decent first half numbers from the firm.
Shares in the asset manager we down by as much as 7% during the morning session before recovering ground to close at £23.68, a loss of 133p, or 5.3%. The shares were also subject to profit tracking, having started the day some 82% higher than their 52-week low of £13.74.
The share performance was on the back of news that a £5.6 billion inflow in the first quarter was followed by the withdrawal in the second quarter.
All the redemptions came in June, when the group was hit by the double whammy of the departure of star fund manager Richard Buxton and a sharp swing in investor sentiment as US Federal Reserve chairman Ben Bernanke indicated quantitative easing could be coming to an end.
According to Lipper, £258 million was pulled from Buxton's UK Alpha Plus fund in June, reducing the fund's size to £2.1 billion.
When carved up, the intermediary channel accounted for £0.8 billion of the second quarter outflow, private banking £0.1 billion and institutional £0.2 billion.
Other headline first half figures from the group were positive.
The firm raised its dividend by 23% on a 25% rise in profit before tax to £221.7 million and a 21% rise in assets under management to £235.7 billion.
In addition to the purchase of Cazenove and US fixed income manager STW, the company saw net inflows of £5.6 billion with performance fees and market gains boosting revenue by 19% to £585.7 million.
Schroders Private Banking experienced net outflows of £300 million due to ‘withdrawals from continuing client relationships’ but the addition of Cazenove’s wealth management division ‘materially increases the scale of our Private Banking business in the UK and extends our offering for private clients’, the company said in a statement.
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