Private debt boosts Schroders Capital’s H1 performance
Schroders Capital saw gross fundraising increase by 16 per cent year-on-year to £5.2bn in the first half of 2024, boosted by the strong performance of its private debt business.
The private markets arm of Schroders group reported net new business of £3bn over the period, of which almost half (£1.4bn) came from its private debt and credit alternatives (PDCA) platform.
Schroders said that it saw continued demand from clients for its securitised credit strategies, amid the higher interest rate environment.
Private markets assets under management (AUM) increased to £68.5bn from £66.2bn last year.
Additionally, Schroders reported an improvement in fundraising dynamics, with non-fee earning dry powder standing at £4.1bn at the end of the period.
However, net operating revenue including performance fees and carried interest decreased to £197.5m from £201.1m in the first half of 2023, with Schroders Capital’s revenue margin impacted by low deal flow in its real estate business.
Private markets are a key area of focus for Schroders group. It recently agreed a partnership with Phoenix Group to launch a new UK private markets investment manager that will help pension savers benefit from diversification into private markets.
Overall, Schroders group reported that AUM reached a record high of £773.7bn, driven by positive markets, investment performance and net new business.
Pre-tax profit edged up to £276.3m from £275.6m in the first half of 2023.
Read more: Schroders Capital creates private markets AI platform
“We are pleased to report increased AUM and positive net new business in the first six months of the year,” said Peter Harrison, group chief executive.
“Of particular note was the seven per cent advised growth in wealth management, improved fundraising in private markets, and a strong performance in fixed income. Whilst our solutions business was impacted by a large client outflow, it also secured some strong wins and mandate extensions.
“Today’s results are further validation that our long-term strategic pivot is helping us to navigate the structural changes our industry is facing. Our capabilities in wealth management, private markets and solutions are enabling us to take advantage of the growth opportunities we have identified and to deliver the investment solutions that our clients need.
Read more: Schroders Capital notes attractiveness of private debt
“As we look to the next six months, we will remain focused on delivering strong investment outcomes for clients, maintaining good cost discipline and continuing to innovate, using new technology and strategic partnerships such as the launch of Future Growth Capital with Phoenix Group, to maintain our leadership position as a global asset manager.
“We are encouraged by the new business opportunities we are seeing, notwithstanding the current backdrop of macroeconomic uncertainties and industry dynamics.”
