Schroders signals recovery on track

Schroders, the fund manager still trying to get over a nasty bout of under performance in the 1990s, yesterday showed more evidence that it is on the road to recovery, reporting a £200m net inflow of business in the first three months of the year.

The historic fund manager suffered a £6bn loss of business in 2001 and £2.2bn in 2002.

Michael Dobson, chief executive, nonetheless remained cautious, saying: "There is clearly a trend there but we are not getting carried away. We have a four-year programme and we are 18 months into it."

Mr Dobson warned that business flows were still "lumpy", and that it was likely that Schroders would probably lose more business during the course of the year.

Further losses are expected to be concentrated in the US, where Schroders has had a particularly bumpy performance. Mr Dobson has embarked on a stringent cost cutting programme since joining Schroders in November 2001 and said the investment house was on track to meet its targets of slicing £100m from costs this year compared to 2001.

That was despite the fact that a recent review of Schroders' pension fund showed a £40m deficit, which the company said would be dealt with by increasing company contributions. This year they will increase by £11.4m.

Schroders has reduced its staff by nearly 600 in 2002, through a combination of redundancies and outsourcing parts of its business.

Mr Dobson's remuneration package, which includes guaranteed cash bonuses of £1.8m each year until 2004, is one of the most generous in the FTSE 100.