By Nishant Kumar
LONDON (Reuters) - British fund manager Schroders Plc (L:SDR) reported a better than expected jump in profits on Thursday, as net inflows more than tripled and assets under management (AUM) rose to a record level, sending its share price to a fresh life-time high.
The result follows forecast-beating profit rises at rivals such as Jupiter (L:JUP), Henderson (L:HGGH) and St James 's Place (L:SJP), as investors flock to actively managed funds in the search for better yields while interest rates remain depressed.
Schroders said it took in a net 24.8 billion pounds of new investments over the year and added 12.3 billion pounds from investment returns, taking its AUM up 14 per cent to a record 300 billion pounds.
"We had a strong growth in institutional mandates, led by a large win from Friends Life," Chief Executive Michael Dobson said in a telephone interview.
"One of the themes last year was the strength of our international network, with strong inflows in Asia and continental Europe," he added.
Schroders shares were up 2.3 percent at 3104 pence at 10.52 a.m., when the FTSE 100 index (FTSE) was up 0.2 percent.
PROFIT BOOST
Net new business from institutions amounted to 17.6 billion pounds last year, with 12 billion pounds coming from insurer Friends Life alone. Its non-UK businesses contributed more than 11 billion pounds to the net inflows.
The biggest boost to new business came from multi-asset funds as the money manager won clients looking for relatively steady returns from a mix of asset classes rather than going for pure equity funds.
Such funds accounted for 16.9 billion pounds in net inflows, more than three times the amount that went into its fixed income or its equities products. At the same time the firm suffered outflows in out-of-favour commodities funds, resulting in a total 1.8 billion pounds of outflows from the firm's broader Emerging Market Debt, Commodities and Real Estate segment.
Schroders also said that more than three quarters of its assets under management were outperforming over three years, boosting last year's pretax profit before exceptional items by 11 percent to 565 million pounds and beating the analysts' forecast of 526 million pounds, according to data from StarMine Smart Estimates.
Total pretax profit rose 16 percent to 517 million pounds.
Net revenue rose by 9 percent to 1.53 billion pounds, slightly ahead of analysts forecasts of 1.52 billion pounds, according to StarMine Smart Estimates data.
The fund manager raised its full-year dividend by 34 per cent to 78 pence per share.
Heading into the result, 14 analysts tracked by StarMine had rated the stock as a "buy" or "strong buy", five considered it as a "hold", while one recommended a "sell".