Fateful day for 'Crystal Ball' man at Schroders
Friday 09 March 2012
Schroders' chief investment officer, Alan Brown, is standing down as part of a shake-up at the venerable fund manager after a year when performance fees halved and private investors pulled billions out of the company.
Mr Brown, known for an annual "Crystal Ball" series of predictions, is staying with the firm as a senior adviser andwill not be getting compensation.
Schroders insists the move is not punishment for under-performance or because investors are departing. It now intends to move forward without a CIO, however. In future, four investment heads will report directly to the chief executive, Michael Dobson.
Schroders, established in 1818, saw private investors pull out nearly £4bn in the last year, compared with an inflow of nearly £8bn in 2010. It blamed "growing concerns over the macroeconomic environment and equity market volatility".
Schroders reported profit for 2011 of £407m, up slightly on the previous year. But funds flowing into the business, including from institutional pension mandates, came to just £3.2bn, compared to £27bn last time. Mr Dobson says that reflects investor panic about stock markets across Europe. "It was a good year for Schroders in quite a difficult environment," he says.
Overall assets under management fell by £9.4m to £187.3bn. Performance fees tumbled from £72.6m to £36.6m, partly reflecting a one-off fee a year ago, but also indicative of worse stock-picking.
The chairman, Michael Miles, aged 75, is also going, after nine years. He will be succeeded by the senior independent director, Andrew Beeson, 67, who has been on the board for eight years.
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