Schroders shares sink as fund group suffers Chinese market volatility

Schroders shares sank on Tuesday as the fund manager blamed Chinese market volatility on £2.3billion of net investor outflows and flagged the loss of large institutional mandates.

The group had total assets under management of £777.4billion as of 30 September, up from £773.7billion three months earlier, largely thanks to £6billion in gains from market performance and foreign exchange movements.

This helped offset £2.6billion in net outflows from its joint ventures and associates business, and £2.7billion from its solutions unit over the period.

Schroders said net outflows for the quarter from the JVs and associates business, which still saw net inflows of £5.2billion in the first nine months of the year, were linked to ‘continued market volatility in China’.

Investors are nervously awaiting a Chinese government meeting later this week, amid hopes for another bumper stimulus package to revive the world’s second largest economy.

Foreign investment into the country has stalled as Chinese growth has stuttered in the wake of a prolonged property slowdown.

Schroders’ asset management unit was boosted by £5.4billion in market gains during the period, but Schroders warned it had been notified of an £8billion outflow from a legacy Scottish Widows mandate.

A further £2billion is set to be pulled by three separate institutional clients.

Schroders said it remains on track to achieve its net new business target of 5 to 7 per cent of operating assets under management per annum.

But Schorders shares 13.9 per cent to 313.2p by late morning, bringing 2024 losses to around 26.4 per cent. 

Chief financial officer Richard Oldfield, who is set to become the group’s next CEO following the departure of Peter Harrison, said: ‘As the new group CEO, I will be leading a business with a strong investment franchise, deep client relationships, exceptional talent and significant potential for profitable growth.

‘I will do what is necessary to deliver on this potential. 

‘Standing still is not an option for Schroders in today’s fast-changing market landscape. We must focus to grow, build greater commercial discipline and drive efficiencies though simplification and flawless execution.’

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