City stalwart Schroders in bounceback as profits step up

Markets are rocky and there is intense pressure on fund managers to cut fees — but that’s yet to hit Schroders, the grand old City firm that has been around since 1804.

Derided not so long ago as “Skodas” owing to bad fund performance, Schroders is now firmly on the front foot.

Funds under management rose by £43 billion to £390 billion, sending profits up 23% to £760 million.

Chief executive Peter Harrison said: “There are headwinds facing the industry but we still believe there remain opportunities for growth.”

With robot traders and index trackers ever more common, Schroders is targeting wealthy clients, especially in emerging markets.

Like rival Jupiter, it can claim it is beating the markets often enough to earn its higher fees. Schroders said nearly 75% of funds are beating their benchmark.

The higher profits enabled it to put the dividend up 22% to 113p.

Shares rose 79p to 3528p, making the company worth £9.4 billion.

“It’s a strong set of results with all bits of our diversified model firing on all cylinders,” said Harrison, citing strong performance in areas such as China, Malaysia, Peru and Argentina.

Lord Howard of Penrith, the senior independent director (pictured) is standing down from the board after nine years.

Ian King, a non-executive for a year, will succeed him.