(Bloomberg) -- Shares of Schroders Plc plunged the most in more than four years after the UK’s largest standalone asset manager reported pretax profit that fell short of expectations in the first half of the year.
The London-based firm said in a statement on Thursday that adjusted pretax profit in the six months through June remained almost flat from a year earlier at £276.3 million ($353 million), and well below an estimate of £333 million.
Shares of the company fell as much as 8.6% in early London trading, the biggest intraday loss since March 2020. Analysts flagged lower revenue and a miss in performance fees that were partly offset by better costs.
An increase in assets under management failed to stem the stock drop. Assets, including in joint ventures, rose to £773.7 billion in the six months through June from £750.6 billion at the start of the year. Chief Executive Officer Peter Harrison, who is stepping down next year, said in the statement that the company will maintain “good cost discipline.”
This week Schroders agreed to establish a new investment management firm together with retirement business Phoenix Group Holdings Plc, which aims to deploy billions of pounds in private assets on behalf of British pensioners.
The London-based firm, whose largest shareholder remains the Schroder family, is among only a handful of asset managers to record consistent client inflows over the past several years while many others in the industry struggle to contain redemptions. It has diversified outside its traditional mutual fund business and in recent years has made a big push into the more lucrative area of private markets.
In the first half of the year, investors pulled an aggregate of £7.6 billion from the firm’s mutual funds, solutions and institutional strategies, but the private markets division saw net inflows of £3 billion. Its wealth business attracted £3.7 billion, while the joint ventures unit had net inflows of £7.8 billion.
--With assistance from Macarena Muñoz.
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