Schroders reported a net outflow of £4.6 billion ($8.7 billion) in institutional assets as of June 30, blamed on poor performances in Japanese equities and a reduction in U.K. balanced mandates, according to financial results released today.
"We have strengthened our Japanese equities team and performance has improved," Schroders' CEO Michael Dobson said in a news release.
The institutional outflow was partly offset by net retail inflows of £2.3 billion, led by European equities, emerging markets and absolute-return bond strategies.
Pre-tax profit for the asset management business declined 3% to £96.8 million in the first half of 2006, compared with £99.8 million for the first six months of 2005. However, the 2005 number included a one-time gain of £20.4 million as a result of discontinuing an outsourcing project.
The firm reported £122.3 billion in assets under management as of June 30, essentially unchanged from Dec. 31. Acquisition of hedge fund of funds firm NewFinance Capital, completed in May, contributed £1.7 billion to the total. NewFinance also contributed £700,000 to the pre-tax profits of Schroders' asset management business.