London: Schroders Plc defied a market slump in the first quarter, reporting £2.7 billion (Dh14.45 billion, $3.9 billion) of net new money as investors returned to emerging markets.
Europe’s largest publicly traded fund manager saw institutional clients invest a net £1.5 billion into developing markets in the three months through March, the company said on Thursday. Helped by £3.3 billion flowing into in multi-assets products, funds under management grew to a record £324.9 billion.
“I wouldn’t go so far as to say we are in a new era, but in a world where growth is scarce there is still opportunity in emerging markets and they are relatively cheap,” newly promoted Chief Executive Officer Peter Harrison said in a telephone interview.
Schroders is bucking the trend, with money mangers that specialise in developing markets reporting outflows. Ashmore Group Plc said last week that $1.1 billion was withdrawn in the period, while Aberdeen Asset Management Plc, which reports next week, has seen more than two years of outflows from its emerging-markets funds.
Schroders first-quarter inflows are still down from £5.1 billion a year earlier. Retail clients pulled a net £1.8 billion of money from the intermediary business during the worst start for equity markets since the financial crisis. More than $7 trillion in value was erased by February amid tumbling commodity prices and growth concerns.
Headwinds
Harrison, who replaced Michael Dobson as CEO this month, said while he is starting to see stabilisation in the markets, headwinds remain.
Schroders may be heading for a showdown with shareholders today following the appointment of Dobson as chairman. Hermes Investment Management, which owns 0.6 per cent of the company, said they have advised clients to vote against his re-election at the company’s annual general meeting, saying a CEO should not then become chairman.
“While we recognise the significant contribution that Michael Dobson has made in his tenure as CEO, we are not able to support the decision,” Hans-Christoph Hirt, co-head of Hermes Equity Ownership Services Ltd., said in a statement. “It’s a breach of a fundamental principle of UK corporate governance and best practice.”
