Schroders assets plummet after foreign exchange crash
Assets at Schroders fell sharply in the first quarter of the year as the money manager significantly undershot expectations in both new cash coming into the business and market performance.
Analysts had been expecting Schroders’ assets under management to dip slightly across the quarter, from £779bn to £775bn, but they instead plummeted to £758.4bn, the firm revealed in a trading update.
Investors across the group lost £12.9bn throughout the quarter on markets and foreign exchange performance, with every sector of the business seeing negative returns.
Schroders said that the majority of these losses came from currency movements, which decreased assets under management by £9.4bn, including £2.3bn in its joint ventures.
Asset managers across the UK have been reporting billions in losses in recent weeks, as the effects of market volatility due to US president Donald Trump’s tariff regime begin to eat into margins.
Losses on the market have ranged from £250m for Premier Miton, to £702m for Liontrust, and a whopping £2.3bn for Polar Capital.
In addition, Schroders also undershot expectations for new cash coming into its core business, with investors depositing £1.1bn over the quarter, compared to analyst expectations of £2.3bn.
While the group’s wealth management arm and private capital business experienced continued investor interest, its public markets arm saw £1.5bn of withdrawals over the quarter.
Meanwhile, the most significant miss came from cash coming into Schroders’ joint ventures and associates, where analysts expected £1.4bn of inflows.
Instead, investors pulled £8.5bn throughout the quarter, which the group said was predominantly driven by outflows from money market funds in China.
“In a challenging external environment, we are actively managing the areas of our business we can control, taking action on costs while continuing to invest in key areas of strength,” said Schroders CEO Richard Oldfield.
“By simplifying, scaling and delivering effectively, we will return our business to profitable growth.”