By Elizabeth Howcroft and Carolyn Cohn
(Reuters) -British asset manager Schroders (LON:SDR) reported a drop in first-half assets under management on Thursday, due to weaker investor sentiment and market volatility.
UK investors are playing it safe, pulling $842 million from equity funds in June in favour of money market and fixed-income funds, fund network Calastone said earlier this month, as they get to grips with higher inflation and interest rates.
"You’re going to have to deal with periods of volatility while people get comfortable with those new numbers," Schroders CEO Peter Harrison told Reuters.
"My suspicion is that we’re at the end of an era and we’re figuring out where we go from here.”
Major central banks around the world have hiked interest rates to contain runaway inflation. The Bank of England has raised rates 13 times since 2021 and is still grappling with inflation at nearly four times its 2% target.
Schroders' assets under management fell to 726.1 billion pounds ($940 billion) in the six months to June 30, from 737.5 billion pounds at December-end. The company generated 5.7 billion pounds in net new business, excluding joint ventures and associates.
It saw operating profit of 341.4 million, up from 316.1 million in the previous six months, but down from 406.9 million in the six months to June last year.
Schroders' shares were flat in early trading, with Jefferies' analysts describing the results as "good enough".
Rivals Jupiter and St James's Place also reported results on Thursday.
St James's Place shares slid 10% to the bottom of the FTSE 100 index after it reported a fall in half-yearly profit after tax on Thursday but attracted 3.4 billion pounds of net inflows in what it called a "challenging period" for UK investors. JPMorgan (NYSE:JPM) analysts said the flows came in below consensus forecasts.
In contrast, Jupiter Fund Management jumped 14% to the top of the FTSE mid-cap after it reported assets under management rose 2% to 51.4 billion pounds.
The fund manager saw "small" net inflows of 23 million pounds, helped by institutional client demand.
In addition to an ordinary dividend of 3.5 pence per share, Jupiter said it would pay a special dividend of 2.9 pence. Peel Hunt analysts said the dividend was "better than expected".
($1 = 0.7724 pounds)