Schroders. KBW European Financials Conference. Massimo Tosato Vice Chairman. 17 September trusted heritage advanced thinking

Transcription

1 Schroders KBW European Financials Conference Massimo Tosato Vice Chairman trusted heritage advanced thinking 17 September 2008

2 Schroders plc Overview Independent Exclusive focus on asset management Global reach Bermuda Cayman Islands Mexico City New York Philadelphia Amsterdam Copenhagen Frankfurt Geneva Guernsey Gibraltar Jersey Lisbon London Luxembourg Madrid Milan Paris Rome Stockholm Vienna Wiesbaden Zurich Beijing Hong Kong Jakarta Melbourne Mumbai Seoul Shanghai Singapore Sydney Taipei Tokyo Performance orientated Diversified by geography, channel & product Financial strength Buenos Aires São Paulo Dubai Bold denotes Investment Centres 1

3 Schroders plc Overview FUM by Channel Income by Channel 9% 12% 33% 52% 39% Institutional Retail Private Banking 55% FUM by Region 12% 39% Income by Region 6% 28% 25% 30% 24% 36% UK Europe Asia Americas 2 Source: Schroders, June 2008

4 2008 Interim Results Asset Management profit before tax million (H1 2007: million) 11% Income and profit growth in Asset Management Successfully repositioning Institutional Challenging market conditions in Retail Private Banking profit before tax 22.3 million (H1 2007: 15.9 million) 40% Continued growth in Private Banking profitability Private Equity and Group loss before tax 23.3 million (H profit: 46.5 million) Lower Private Equity realisations as anticipated and mark to market write downs on Group ABS/MBS portfolio in Q1 Total profit before tax million (H1 2007: million) 27% H core business profits up 14% to 159mn despite difficult market conditions 3

5 The challenges

6 Asset management a changing landscape Channels Growth of individual and instividual savings Decumulating investors outgrowing accumulating investors Demographic development Percentage of population, Europe 40 Accumulating (40-59) Decumulating (60+) Source: Mckinsey 5

7 Asset management a changing landscape Increasing demand for investment solutions Products Outcome oriented products Alternatives Markets Asia and other emerging markets Sovereign Wealth Funds Business model Growth opportunities beyond domestic client base Change in distribution dynamics 6

8 Value chain convergence Manufacturing Packaging/design Distribution End client Future battleground or partnership? Strategic advice, insurance, risk management, provision of beta, etc. 7

9 Challenging conditions in Retail short-term Market volatility impacting retail demand worldwide Record industry outflows in Europe Conflict of interest in commercial banking distribution Balance sheet requirements ETF & MiFID H1 Record net industry outflows in Europe bn H H H H H H H Feri SalesWatch data, All Europe, ex Money Market including local to local and cross-border 8

10 Product convergence Global product development continuum Market tracking Innovative products Above Average Growth ETF Index funds Multi-asset Structured products Real Estate Hedge funds Private Equity Quantitative Below average growth Active equities Active bonds Money market Traditional products Revenue margin Source: Putnam Lovell, TABB Group estimate, Schroders 9

11 Leveraging the opportunities

12 Leveraging the opportunities Strength of international and channel diversification billion funds under management, 61% outside of the UK Income diversified by channel: 55% Retail, 33% Institutional and 12% Private Banking North America 12.8bn South America 3.3bn UK 50.6bn Continental Europe 28.4bn Middle East 2.4bn Asia Pacific 32.7bn 3.3bn China joint venture June 2008 funds under management: Investment by client domicile China joint venture funds under management are not reported within Group funds under management 411

13 Leveraging the opportunities Diversity of Product Range Multi-asset 15% Private Banking 9% Equities 51% UK equities Global equities Asian equities European equities Emerging market equities Pacific equities Asia pacific bonds US equities Quantitiative equities Asia Pacific bonds European bonds Global bonds Alternatives 14% UK bonds Commodities Fund of Hedge funds US bonds Emerging market debt Property Fixed Income 11% Multi-asset Private Banking 612 FUM Data: 30 June 2008, Schroders

14 Leveraging the opportunities Increasing capability in alternatives Property Fund of hedge funds Commodities & Agriculture Private Equity Alternative FUM 19.0bn property 2.9 fund of hedge funds private equity funds of funds emerging market debt commodities 13

15 Our priorities Institutional business Strategy Focus on growth channels Product strategy built around innovation Increase gross sales Grow profit margins Build opportunistic products for specific market opportunities Update Gross sales accelerating driven by new products (DGF, LDI, QEP) Lower redemptions Q positive NNB quarter Swiss Re acquisition 14

16 Our priorities Retail business: tactics for a bear market Strategy Getting closer to the client (direct open architecture) Reposition as a solutions provider (outcome orientated products) Brand and marketing investment to support the above Increase presence in pre and post retirement markets Update Discretionary to advisory: UK over 75% and Europe approximately 40% of gross sales in 2007 Growing multi-asset and absolute return products Defensive work activity levels are very high Longer-term channel targets: insurance companies, sub-advised and GFIGs Complete selective regional growth 15

17 Outlook and conclusions Challenging market environment to continue Balancing cost discipline and investment for future growth Well positioned longer-term diversity of business balance sheet strength 16

18 Forward-Looking Statements These presentation slides contain certain forward-looking statements and forecasts with respect to the financial condition and results of the businesses of Schroders plc These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may occur in the future There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by those forward-looking statements and forecasts. Nothing in this presentation should be construed as a profit forecast 17