Private markets growth boosts Schroders’ AUM
Private markets contributed to the growth of Schroders’ assets under management (AUM) last year, despite ongoing economic headwinds.
The asset manager grew its AUM to £750.6bn in 2023, a two per cent rise from £737.5bn the previous year. This was despite an adverse foreign exchange headwind of £25.8bn.
However, the company reported that while closing AUM for the year was up, “we entered 2023 with a headwind from depressed market values following the fall in markets in the second half of 2022.”
This impacted revenues, which were down by one per cent year on year.
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“In one of the most challenging years for global active asset managers in recent times, our resilient performance in 2023 demonstrated the consistent execution and benefits of our long-term strategy for clients and shareholders,” said Peter Harrison, group chief executive of Schroders.
“In 2016, we set out to build a stronger presence across private markets, wealth management and solutions. The strong growth rates of these businesses mean they now account for 56 per cent of our AUM and 48 per cent of our net operating revenue.
“We saw notable growth in assets under management and positive net new business, winning important new clients. Our wealth management advisory business achieved a standout performance, with strong advised organic growth.
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“Schroders Capital saw good fundraising against a tough backdrop, and we saw positive net flows across all four pillars, especially real estate. This performance was underpinned by our differentiated strategy.”
Schroders Capital raised £9.3bn in 2023, and the company reported positive net flows across all four pillars of its private markets business, including private debt. The company confirmed that it has £4bn in non-fee earning dry powder ready to be deployed.
“We anticipate an improvement in fundraising and deployment dynamics over the medium term,” the company reported.
“The strength of the long-term structural trends that underpin the shift to private markets remains strong. This, combined with our well diversified product range and the progress made to further scale our platform gives us confidence in the outlook for this business.”
Schroders also announced that Rhian Davies will not stand for re-election to the board at the upcoming annual general meeting. Iain Mackay will succeed Davies as chair of the audit and risk committee.
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