UK fund manager Schroders LDI’s assets fall by Stg 20 billion

  • Schroders AUM drops 2.7%, Solutions Unit AUM drops 9%
  • Jupiter also experiences lower AUM but net outflows are slowing
  • St James’s Place records 15% drop in net inflow

Oct 20 (Reuters) – British fund manager Schroders (SDR.L) lost 20.2 billion pounds ($22.79 billion) in assets in the third quarter of the unit that houses its investment business passive-driven (LDI) under fire, he said on Thursday.

LDI is a source of revenue for asset managers like Schroders, Legal & General (LGEN.L) and BlackRock (BLK.N), sold primarily to pension funds.

UK bond yields soared in a few trading sessions last month following a “mini-budget”, which sparked a rush for cash from pension funds to cover their positions in LDI derivatives.

Join now for FREE unlimited access to Reuters.com

Schroders reported assets under management (AUM) of 205.5 billion pounds in its Solutions unit, which hosts its LDI business, as of September 30, down from 225.7 billion pounds at the end of June.

Schroders’ overall assets under management fell 2.7% to £752.4 billion.

Separately, Jupiter Fund Management (JUP.L) on Thursday reported a 1.4 billion drop to 47.4 billion pounds in assets under management, while its counterpart St. James’s Place (SJP.L) recorded a decline sharp inflows in the third quarter as investors battled market volatility.

After a surge in AUM during the pandemic, global fund managers are now seeing a decline in assets under management amid concerns about UK financial stability and a sharp sell-off in stocks and bonds these weeks has heightened concerns about the recession.

While wealth manager St. James’s Place’s AUM was up slightly from the previous quarter, funds under management at the close fell more than 3% to 143 billion pounds, compared to a year ago. .

The updates come a day after a quartet of UK fund managers – Britain’s largest listed hedge fund firm Man Group (EMG.L), Quilter (QLT.L), Rathbones (RAT.L ) and Liontrust Asset Management (LIO.L) – said their assets under management fell by a total of $9.8 billion in the three months to the end of September.

Jupiter meanwhile reported a lower than net outflow of £600m, saying more resilient institutional investors helped it beat expectations. St. James’s Place saw net inflows down 15% to 2.19 billion pounds.

Schroders did not disclose further details.

Shares of Schroders fell 0.8%, while St. James’s Place rose 0.5% and Jupiter rose 6.9% at 12:36 GMT.

($1 = 0.8862 pounds)

Join now for FREE unlimited access to Reuters.com

Reporting by Sinchita Mitra in Bengaluru; edited by Sinead Cruise, Elaine Hardcastle

Our standards: The Thomson Reuters Trust Principles.