Schroders boasts ‘particularly strong’ flows in its real estate business
Schroders, the FTSE 100-listed fund group, said in results issued today (29 February) that flows in the real estate business within its private markets division were “particularly strong” at £1.6bn last year.
This was down on £4.8bn in 2022 but was a key contributor to net new business of £4.5bn (2022: £6.6bn) for the private markets division, known as Schroders Capital, across private equity, private debt, infrastructure and real estate.
In total, the private markets division generated fundraising of £9.3bn (2022: £15.2bn) “despite the broader cyclical slowdown in private markets and cautious investment sentiment”.
Schroders, the FTSE 100-listed fund group, said in results issued today (29 February) that flows in the real estate business within its private markets division were “particularly strong” at £1.6bn last year.
This was down on £4.8bn in 2022 but was a key contributor to net new business of £4.5bn (2022: £6.6bn) for the private markets division, known as Schroders Capital, across private equity, private debt, infrastructure and real estate.
In total, the private markets division generated fundraising of £9.3bn (2022: £15.2bn) “despite the broader cyclical slowdown in private markets and cautious investment sentiment”.
Non-fee-earning dry powder stood at £4bn, which will be ready to deploy into market opportunities.
Overall, the London-headquartered fund group posted a 16% drop in pretax profit, caused by headwinds in the markets and adverse foreign exchange rates, but said positive flows provided a boost to total assets under management. Pretax profit stood at £487.6m at the end of 2023, down from £586.9m the previous year. Operating profit dropped by 9% to £661m.
Assets under management grew by 2% year-on-year to £750.6bn, but average assets under management for the year were 3% lower owing to the fall in markets in the second half of 2022.
“Last year, the asset management industry faced one of its most challenging years in recent times,” said Schroders’ group chief executive, Peter Harrison. “Despite the turbulent macroeconomic backdrop, volatile markets and heightened geopolitical tension that characterised 2023, our clear strategy enabled us to deliver positive flows and growth in AUM.”
Harrison added that the group’s long-term strategy to build a stronger presence across private markets, wealth management and solutions was producing strong growth rates for these businesses. They now account for 56% of AUM and 48% of net operating revenue.
“Looking forward, the markets remain unsettled because of geopolitical uncertainty in a year of electoral change,” Harrison said. “While our profits last year were impacted by headwinds in the markets and adverse foreign exchange rates, we took steps to proactively manage our cost base and delivered efficiency initiatives to enable future reinvestment in the business.
“We therefore start this year in a strong position to capitalise on some interesting market opportunities, with the prospect of interest rates falling and the rotation of clients’ assets back into risk assets.”
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