Schroders Personal Wealth continued struggling to hold onto assets amid the coronavirus crisis in 2020, which also saw Aviva Investors’ operating profits slump but Rathbones hit £55bn in funds under management.
Schroders’ assets under management hit a record high of £574.4bn in 2020, a 15% increase from £500.2bn in 2019, as £42.5bn flowed into the business.
Group chief executive Peter Harrison said this was driven by “strong demand in our private assets, wealth management and solutions businesses,” with these higher growth areas accounting for 54% of the company’s AUM.
Despite the coronavirus pandemic Schroders private assets and alternatives business took in net inflows of £500m for the year. By contrast its traditional mutual funds business suffered £3.1bn in net outflows.
Its £72bn wealth management arm also did well weathering the storm, bringing in net new business of £1.7bn, though this was down from £14.7bn in 2019. Cazenove Capital brought in £1.2bn, with a further £0.7bn from Benchmark Capital. Net income increased by 24% to £382.7m, from £309.6m in 2019.
An additional £2.4bn of client assets was added to its wealth arm thanks to Cazenove’s acquisition of Sandaire for £34.7m last year.
SPW hit by £200m of net outflows
However flows into its wealth business were dented by Schroders Personal Wealth which saw investors yanking a further £200m last year.
The business was founded in collaboration with Lloyds Banking Group in 2019 to provide a financial planning business for mass-affluent customers in the UK. However, it has continued to see net outflows which the company attributes to a drop in client referrals due to the Covid-19 restrictions.
“Good progress has been made in positioning the business for future growth with refreshed leadership and improved infrastructure,” Schroders said in its full year results.
Rathbones sees FUM hit £55bn
Rathbones results showed a positive 2020, after a shaky year which saw outflows of £200m in the third quarter.
Its funds under management grew by 8.5%, reaching £54.7bn at the end of year, largely thanks to a bumper £500m of inflows in the final quarter of 2020. Total net inflows last year amounted to £2.1bn.
Its investment management business was hit with outflows of £3.3bn, despite receiving a boost of £600m of inflows with the acquisition of Barclays Wealth’s personal injury and court of protection business.
“The pandemic has not altered our strategy, rather it has helped to accelerate our plans in many areas. During the year we made good progress on digital infrastructure initiatives and the automation of client administration processes,” said chairman, Mark Nicholls.
Nicholls will be replaced by former Phoenix CEO Clive Bannister on 6 May.
Aviva Investors profits slump
Aviva Investors’ 2020 preliminary results reveal its operating profit declined by 11% to £85m, despite it taking in £8.5bn of net flows.
The company said that lower revenues were impacted by “lower contribution from securities lending and a reduction in origination fees reflecting lower demand for alternative strategies as risk appetites reduced in response to Covid-19.”
Total AUM for the year came in at £366bn. The fund group said it “has an ambition to become a leader in active sustainable investment outcomes”.
“Its long track record in private debt, infrastructure and other real assets, has supported our growth in areas such as bulk purchase annuities,” it added.
