Schroders Reports First Outflows in Two Years After Selloff

Schroders Plc, Europe’s largest publicly traded fund manager, reported 500 million pounds ($769 million) of net outflows in three months through September during the worst quarterly selloff for global equity markets since 2011.

Total assets under management fell to 294.8 billion pounds at the end of the quarter, down 5 percent from the end of June, as the firm lost 14.6 billion pounds in investment returns, the company said Thursday. On a nine-month basis, inflows were still up 18 percent to 8.3 billion pounds.

“It’s somewhat unusual for us, the last time we had net outflows was the second quarter of 2013,” Chief Executive Officer Michael Dobson said in a telephone interview. “I think some institutions were delaying decisions because of all the market uncertainty. About 12 hours after the quarter ended we had 2.3 billion pounds of net new business.”

The shares climbed 0.7 percent to 3,026 pence at 10:40 a.m. in London, extending their gain this year to 12.5 percent.

Schroders numbers compare to Henderson Group Plc, which reported net inflows of 1.3 billion pounds for the quarter, and Jupiter Fund Management Plc’s 77 million pounds of new money. More than $3 trillion in value was erased from global equities in the period as slowing growth in Asia and uncertainty over U.S. monetary policy weighed on sentiment and stoked volatility.

China Concerns

Dobson said outflows came from Hong Kong, Singapore and Taiwan, driven by concerns about China’s growth. The wealth management unit saw 200 million pounds outflows as high net worth individuals delayed investment decisions, the CEO said.

“We have got a pipeline of business that we have won which hasn’t yet been funded,” he said. “My sense is that some of that might be delayed because there is quite a lot of uncertainty around as investors assess where this market is going. There is still a desire to allocate towards equities.”

Dobson said he wouldn’t be surprised if institutional investors sat on their hands until the first quarter of 2016. He also said sovereign wealth funds, which have been increasing cash levels, may also have an impact on industry flows, particularly in countries that are dependent on oil.

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