Schroders Earnings: Disappointing Growth in AUM

Narrow-moat Schroders reported a disappointing 1% increase in assets under management for the first quarter of 2024 compared with end-2023. If we exclude the growth from Schroders’ wealth management operations, the core asset management business’ AUM would be flat. Considering that most asset class valuations increased in the quarter, this would suggest that Schroders suffered net client outflows in its asset management business. Our current estimate of client net inflows of 4% of starting AUM looks optimistic, but Schroders still has nine months to make up lost ground. At this stage, we are not changing our earnings estimates or our GBX 500/share fair value estimate for Schroders. It does not report earnings every quarter. For the first quarter, it only discloses AUM. The subsequent full earnings disclosure will be in its interim results in August.